Legal Question in Construction Law in Michigan

Releasing retainage

After completing a $3 million project for a local church, their loan company is refusing to release the 5% retainage until we get Full Unconditional Lien Waivers from all of the subcontractors. In order to get signatures on Full Unconditionals we must pay them first, then be reimbursed our full retainage amount. (To do this, we will have to take a loan out, pay interest on it, and hope the loan agency then pays us in a timely manner) We have never operated this way, and even all of the subs know they don't get paid until we get paid. The loan agency basically has us cornered however, if we want to close the job, we have no other choice. Are there any other avenues we can take? What does the law actually state regarding releasing retainage?


Asked on 4/09/09, 4:02 pm

1 Answer from Attorneys

Patrick Tracy Patrick J. Tracy, Esq, P.E.,

Re: Releasing retainage

The answer lies in the contracts you signed for construction. Without a review of the contracts, I cannot comment further. The biggest headache for an owner is to have a job completed and have one of the subcontractors file a mechanic's lien because he was not paid.

Seek local counsel for further assistance.

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Answered on 4/09/09, 4:26 pm


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