{"data":{"id":"us-ky/krs-371.410","jurisdiction":"us-ky","citation":"KRS 371.410","heading":"Retainage that may be withheld -- Release of retainage -- Substantial","body":"completion.\n(1) Notwithstanding any provision of the Kentucky Revised Statutes to the contrary,\nuntil fifty percent (50%) of the construction project has been completed in\naccordance with the contract, a contracting entity, contractor, or subcontractor may\nwithhold no more than ten percent (10%) retainage from the amount of any\nundisputed payment due, and retainage held after fifty -one percent (51%) of the\nconstruction project has been completed shall not be more than five percent (5%) of\nthe total contract amount.\n(2) Within thirty (30) days after substantial completion of a construction project, the\ncontracting entity or contractor shall release the retainage less an amount equal to\ntwo hundred percent (200%) of the contracting entity's reasonably estimated cost of\nthe balance of any contractor's or subcontractor's contractually obligated, yet\nuncompleted, work remaining. The contracting entity's agent shall determine the\nreasonably estimated cost due under this subsection. The contracting entity,\ncontractor, and any subcontractor with work yet to be completed shall mutually\nagree with the schedule for completion of the work necessary for release of final\npayment. Within fifteen (15) business days after the retainage has been released by\nthe contracting entity to the contractor, the contractor shall release to the\nsubcontractors their proportional shares of the retainage. For purposes of this\nsubsection, \"substantial completion\" is the  point at which, as certified in writing by\nthe contracting entity, a project is at the level of completion, in strict compliance\nwith the contract, where:\n(a) Necessary approval by public regulatory authorities has been given;\n(b) The owner has received all required warranties and documentation; and\n(c) The owner may enjoy beneficial use or occupancy and may use, operate, and\nmaintain the project in all respects, for its intended purpose.\nPartial use or occupancy shall not necessarily result in the projec t being deemed\nsubstantially complete and shall not be evidence of substantial completion.\n(3) If a contracting entity, contractor, or subcontractor fails to pay retainage, if any,\npursuant to the terms of a contract or as required in this section, the con tracting\nentity, contractor, or subcontractor shall pay interest to the contractor or\nsubcontractor to whom payment was due, beginning on the first business day after\nthe payment was due, at the rate of twelve percent (12%) per annum.","path":["KRS Chapter 371"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=35259","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:59:08Z","sha256":"687e0fcafa69ab85722b28ecb2b947674c51bfa691306a06dcd5263b7c770f49","source_id":"us-ky","stale":false,"prev":"us-ky/krs-371.405","next":"us-ky/krs-371.415"},"notice":"GroundRules: Original legal text. Not legal advice."}