What is Retention Money?
Доля платежа, удерживаемая у подрядчика в ходе и после строительства, обеспечивает устранение дефектов в гарантийный период до выплаты оставшейся суммы.
Description
Retention money is a portion of each progress payment, typically 5 to 10%, that a client withholds from a contractor during construction. Half is usually released upon practical completion, and the remainder at the end of the defects liability period (typically 12 months). This incentivizes the contractor to return and fix any issues.
In Dubai's construction industry, retention clauses are standard in FIDIC-based contracts. For a project valued at AED 50 million with 10% retention, AED 5 million is withheld. At handover, AED 2.5 million is released, and the remaining AED 2.5 million is released after the defects liability period if all snags are resolved.
How to interpret
For buyers, retention money is reassuring because it means the developer has financial use over the contractor throughout the defects liability period. It is one reason why established developers with structured construction contracts often deliver better standard than those using loosely managed subcontractors. When evaluating a developer, ask whether their contracts include industry-standard retention provisions.
The size of the retention and the defects liability period length are indicators of how seriously a developer takes post-handover standard. A 10% retention held for 12 months provides meaningful incentive for contractors to return and fix issues promptly.
Контекст рынка Дубая
For property investors, retention money is relevant when purchasing from a developer, it means the developer has financial use over the contractor to ensure build standard. Well-managed retention processes result in better-finished buildings and fewer post-handover issues.
In Dubai, this applies across both off-plan and ready property segments, with specific rules set by the Dubai Land Department and RERA.
Frequently asked questions
A percentage of payment withheld from a contractor during and after construction to ensure defects are remedied during the defects liability period.
Retention money is a portion of each progress payment, typically 5 to 10%, that a client withholds from a contractor during construction. Half is usually released upon practical completion, and the remainder at the end of the defects liability period (typically 12 months).
For buyers, retention money is reassuring because it means the developer has financial use over the contractor throughout the defects liability period. It is one reason why established developers with structured construction contracts often deliver better standard than those using loosely managed subcontractors.
For property investors, retention money is relevant when purchasing from a developer, it means the developer has financial use over the contractor to ensure build standard. Well-managed retention processes result in better-finished buildings and fewer post-handover issues.
Oliva feeds Retention Money into a proprietary 6-dimension score that rates eparticularly Dubai project on Financial Value, Market Dynamics, Location, Developer Trust, Risk, Macro Context, and Liquidity. This keeps comparisons consistent across hundreds of listings.
For a project valued at AED 50 million with 10% retention, AED 5 million is withheld. At handover, AED 2.5 million is released, and the remaining AED 2.5 million is released after the defects liability period if all snags are resolved.
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This content is for educational purposes only and does not constitute investment, financial, legal, or tax advice. Yields, returns, and market data referenced are historical or estimated and are not guaranteed. Capital is at risk. Seek independent professional advice before making investment decisions. Oliva is a licensed Dubai real estate advisor (DLD Broker Card: 92025, RERA BRN: 1573501). Read our Key Risks Disclosure and Disclaimer.