Retention is released after final completion or punch list acceptance, as defined in the contract. When is this release typically specified?

• A. After final payment
• B. After final completion or acceptance of punch list work, as defined in the contract
• C. At project inception
• D. After a one-year warranty period

Answer: (B)

Retention is held to protect the owner until the work meets the contract’s requirements and any remaining items are resolved. The contract defines when “final completion” occurs or when the punch list items are accepted, and the release of the retention is tied to those defined milestones. That makes sense because the contractor could finish on paper but still have outstanding deficiencies; releasing retainage only after final completion or punch-list acceptance ensures those deficiencies are addressed to the owner’s satisfaction. It’s not tied to project inception, nor is it automatically linked to a warranty period, and while final payment sometimes happens around the same time, the contract specifies the actual trigger for release, which is the completion/acceptance milestone.