Tennessee § 66-34-203 - Withholding of payment or retainage by owner.

§ 66-34-203. Withholding of payment or retainage by owner.

This chapter does not prevent the owner from reasonably withholding payment or a portion of a payment to the prime contractor, as long as the withholding is in accordance with the written contract between the owner and the prime contractor. The owner may also withhold a reasonable amount of retainage as specified in the written contract between the owner and the prime contractor, as long as the retainage amount does not exceed five percent (5%) of the amount of the contract. Acts 1991, ch. 45, § 1; 2007, ch. 201, § 4; 2020, ch. 749, § 20. Compiler's Notes. Acts 2007, ch. 201, § 7 provided that the act, which added the proviso at the end of the last sentence, shall apply to all construction contracts to which the act applies entered into on or after July 1, 2007. Acts 2020, ch. 749, § 42 provided that the act, which amended this section, applies to actions occurring and contracts entered into, amended, or renewed on or after July 1, 2020. Amendments. The 2020 amendment inserted “prime” three times, substituted “This chapter does not” for “Nothing in this chapter shall”, “, as long as the withholding” for “; provided, that such withholding” and “, as long as the retainage” for “; provided, however, that the retainage”. Effective Dates. Acts 2020, ch. 749, § 42. July 1, 2020.