CABL Forum - Re: legal services needed

Public:
Retainage cannot exceed 5% of any partial payment. ALA. CODE § 39-2-12(c)
(2005). However, after 50% of the project has been completed, no further retainage can
be withheld. Id. The retainage shall be held until the completion of the project (unless a
escrow arrangement or deposit arrangement is utilized). Id. (For more on escrow or
deposit arrangements, see ALA. CODE §§ 39-2-12(e), (f), and (g)). Line item release is
possible upon completion and acceptance of each separate building or division of the
contract, unless such division is an integral part of the contract. ALA. CODE § 39-2-12(d);
see also § 39-2-12(i) discussing payment procedures and accrual of interest. The
contractor may elect to substitute securities in lieu of retainage, e.g., bonds or notes of
U.S. or Alabama, or certificates of deposit. ALA. CODE § 39-2-12(g).
Private:
As between a contractor and a subcontractor, the percentage of retainage shall not
exceed the percentage of retainage on payments made by the owner to the contractor.
ALA. CODE § 8-29-3(f) (2005). Any percentage of retainage by the contractor to the
subcontractor that exceeds the percentage of retainage between the owner and the
contractor shall be subject to interest at the rate of 1% per month. Id. Similarly, as
between two subcontractors, the percentage of retainage shall not exceed the percentage
of retainage between the contractor and the subcontractor. ALA. CODE § 8-29-3(g)
(2005). Any percentage of retainage on payments made by one subcontractor to another
that exceeds the percentage of retainage on payments made by the contractor to the
subcontractor shall be subject to interest at the rate of 1% per month.
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Re: legal services needed