N.Y. General Business Law § 756-c: Retention

§ 756-c. Retention. By mutual agreement of the relevant parties an

owner may retain no more than five per centum of the contract sum as

retainage. A contractor or subcontractor may also retain no more than

five per centum for retainage and in no case shall retainage exceed the

actual percentage retained by the owner. Retainage shall be released by

the owner to the contractor no later than thirty days after the final

approval of the work under a construction contract. In the event that an

owner fails to release retainage as required by this article, or the

contractor or subcontractor fails to release a proportionate amount of

retainage to the relevant parties after receipt of retainage from the

owner, the owner, contractor, or subcontractor, as the case may be,

shall be subject to the payment of interest at the rate of one percent

per month on the date retention was due and owing.