Mississippi Has a New Retainage Law for Private Projects

By:  Lynn Patton Thompson

For private construction contracts entered into on or after July 1, 2024, the maximum rate of retainage that may be withheld is 5%. Owners, contractors, and first-tier subcontractors can withhold more than 5%, but the cost for that will be payment of interest on the excess amount withheld at the rate of 1% per month. Retainage can be withheld until “final completion”, which is also defined in the new statute. There are some exceptions, including that the new retainage law will not apply to residential construction contracts or contracts for $10,000.00 or less. For the full statute, and its legislative history, go to https://www.legislature.ms.gov/legislation/ and search for measure S.B. 2762.