As many of you may recall from our previous blogs (Is your money being retained? Time to have your say) and (Private Members’ Bill introduced for construction retentions), in January of this year three key events occurred in relation to retentions:

  1. 9 January 2018: Peter Aldous MP introduced before Parliament a private member’s bill (the Construction (Retention Deposit Schemes) Bill) aimed at safeguarding retentions via a deposit scheme similar to that used for residential tenancy deposits;
  2. 15 January 2018: Carillion plc went into compulsory liquidation, with reports of millions of pounds of retentions being lost by its various sub-contractors;
  3. 19 January 2018: the Department for Business, Energy and Industrial Strategy’s consultation on retentions in the construction industry closed.

Eleven months on, we continue to await the outcome of the Government’s consultation (originally expected in June) and the Bill’s second reading has once again been postponed, now to 23 November 2018.

While we hear the Government has a big issue on its plate (something called Brexit), with the demise of more and more construction firms, the continued delay in addressing the issue of retentions clearly is of no help to an already struggling construction sector.

Of course, parties are free to take matters into their own hands, whether that be agreeing that retentions will not be held, using alternative methods of security (such as escrow accounts, bonds, etc.), and/or all parties working together to ensure a quick and effective release of any retention monies held. Further, contractors and/or sub-contractors who are experiencing delays in receiving retention monies should be availing themselves to the provisions with their contracts and/or the Housing Grants, Construction and Regeneration Act 1996 (the Construction Act) to obtain monies that are rightfully theirs.

In the meantime, we eagerly await the publication of the outcome from both the retentions and the related Review of the Construction Act consultations, along with the long delayed second reading of the Construction (Retention Deposit Schemes) Bill.

For further information regarding this topic or any other construction matter, please contact Brenna Baye – Associate, or any member of Edwin Coe Construction team.

Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.

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