Prompt Payment Ordinance


Contractor Prompt Payment Ordinance. This Ordinance provides that a retainage of 10% of the payment may be withheld from a payment under a construction contract prior to the completion of 50% of the contract. Provides that after 50% of the contract is completed, the amount of retainage for any subsequent payment may not exceed 5%. Effective immediately.

Prompt Payment Ordinance

AN ordinance concerning business.
Be it enacted by the [Insert Governing Body],represented in the [Insert Jurisdiction]:
Section 1. The Contractor Prompt Payment Ordinance as follows:
A construction contract may provide for the withholding of retainage of up to 10% of any payment made prior to the completion of 50% of the contract. When a contract is 50% complete, retainage withheld shall be reduced so that no more than 5% is held. After the contract is 50% complete, no more than 5% of the amount of any subsequent payments made under the contract may be held as retainage.


Adopted by the American City County Exchange Task Force on July 16, 2020

Approved by the Board of Directors on August 9, 2020