Construction Retention: Track Release Dates on Your Gantt

What is construction retention and why does it affect your cash flow?

In Thai construction contracts, retention — also called เงินประกันผลงาน — is a percentage of each progress payment that the owner withholds until defined release conditions are met. The standard rate on Thai residential and small commercial projects is five percent of the contract value. On a two-million-baht job that means 100,000 baht held back across the build and the defect liability period that follows it. For a contractor managing two or three concurrent projects, total retention outstanding can represent a meaningful portion of working capital — money earned but not yet received. The most common problem is not the retention itself but the absence of a plan for when it returns: no milestone in the schedule, no agreed date, no reminder when the defect period expires. Contractors who leave retention untracked routinely wait months longer than necessary to recover cash that is already owed.

What are the two stages at which retention is typically released in a Thai contract?

Most formal Thai construction contracts release retention in two stages. The first stage — usually half the withheld amount — is released at practical completion or handover, once the owner signs the acceptance certificate. The second stage releases at the end of the defects liability period, typically six months to one year after handover, provided the contractor has rectified all defects raised during that period. Some contracts combine both stages into a single payment at the end of the defects period. The critical detail most contractors miss is that the trigger is not time alone — it is time plus a condition. The defects period clock may expire but the owner can still withhold the second stage if unrectified defects remain. Knowing both the date and the condition is what lets you plan the release as a milestone in your Gantt planning view.

How do you add retention release milestones to the Gantt planning view?

Before the project starts, review the contract and identify the two release triggers and their target dates. Then create two zero-duration milestone tasks in the Gantt planning view in SiteBoard: one for Stage 1 release at practical completion and one for Stage 2 release at the end of the defects period. Name them clearly — "Retention Stage 1: Handover Sign-off" and "Retention Stage 2: Defects Period End." Link Stage 1 to the final task that leads to handover acceptance. Link Stage 2 to Stage 1 with a duration equal to the agreed defects period. When any upstream task slips, you see immediately whether it threatens the retention timeline. This makes retention cash-flow visible in the same tool you use for the build, so it is never a surprise at month seven when you realise the release date passed unnoticed.

A worked example: a 2.2 million baht shophouse renovation in Nonthaburi

Khun Arthit, a renovation contractor in Nonthaburi, signed a 2.2 million baht shophouse contract with a five percent retention clause and a six-month defects liability period — 110,000 baht withheld in total. He placed two milestone tasks on the Gantt: Stage 1 at week fourteen, worth 55,000 baht, and Stage 2 six months later, worth a further 55,000 baht. With Stage 1 visible in the plan, his team built the punch-list tasks into the final two weeks and hit the handover date on time. The owner signed and released Stage 1 within five days. During the defects period, a kitchen drain was found to be leaking. Arthit added a repair task to the Gantt, completed the rectification, and logged an on-site progress update with before-and-after photos. At the six-month mark he messaged the owner pointing to the completed repair update and requested Stage 2 release. The owner confirmed within a week. Without the milestones on the Gantt, Arthit estimated he would have chased the release two to three months later than that.

How should you document defect rectification to make Stage 2 release straightforward?

When an owner reports a defect during the defects period, add it as a named task in the Gantt — "balcony waterproofing repair," "kitchen drain resealing" — so it sits alongside the original build tasks. As your team completes the repair, log an on-site progress update with a before-and-after photo. Do this for every defect raised, however small. When you reach the end of the defects period and request Stage 2 release, the Gantt and update history give the owner a complete timestamped record of every defect notified and every one resolved. This removes the most common source of Stage 2 friction: the owner's uncertainty about whether all issues were fixed. A contractor who can point to the task record and the photos rarely faces a drawn-out Stage 2 release discussion.

What is the right way to calculate retention on a phased-payment project?

Retention applies as a percentage of each progress payment, not just the final one. On a 2 million baht contract with a five percent rate and four equal milestones of 500,000 baht each, 25,000 baht is held back per milestone — 100,000 baht cumulative by the end. Some contracts cap total retention at a fixed percentage of the contract value once a completion threshold is passed. Check the contract for two things: the rate per payment and whether there is a cap. A contractor who misreads a capped retention clause can be surprised by how much is still withheld at handover. Clarify this at contract signing and record the agreed total in a note on the Stage 1 milestone task in SiteBoard so the number is visible in the plan rather than buried in paperwork.

How does the owner sharing link reduce friction at retention release time?

An owner who has followed the build through the owner sharing link arrives at the Stage 2 retention review with visibility of every defect task raised and completed during the defects period. They do not need to ask whether the drain was fixed or the render crack repaired — they can see the on-site progress update timestamped to the repair date. This shared visibility removes the uncertainty that most often delays Stage 2 release: the owner's concern that something may have been left unresolved. Before sending the Stage 2 release request, prompt the owner to review the defect tasks through the sharing link. If everything shows as complete with photos, their confidence in releasing the payment is much higher than it would be from a verbal assurance alone.

FAQ: Can the owner withhold retention indefinitely once the defects period has expired?

No — once the defects period ends and all notified defects are rectified, the retention is contractually owed. An owner who withholds it beyond that point is in breach of the payment terms. Your practical protection is documentation: the Gantt task list showing every defect and its completion date, the on-site progress update photos timestamped to each repair, and a written Stage 2 release request sent via LINE or email. A formal written request starts any contractual payment clock and creates the record you need if the dispute escalates. For a contractor working without a written contract, the same documentation still strengthens your position in a negotiated recovery, even without a formal contractual right to rely on.

FAQ: How long is the standard defects liability period on a Thai residential project?

For Thai residential projects — new homes, townhouses, and full renovation contracts — the standard defects period is one year from the handover acceptance date. Some commercial and institutional contracts specify two years. Informal verbal contracts often have no defined period, creating ambiguity at both the start and the end. If your contract is silent on the length, establish it in writing before or at handover: a LINE message stating that the contractor's defect obligations extend one year from the handover date, acknowledged by the owner, creates a workable reference. Record the agreed end date as a milestone in the Gantt planning view so both parties have the same visible target for Stage 2 release.

FAQ: What is the difference between retention money and a performance bond?

Retention and a performance bond serve related but distinct purposes. Retention is money withheld from your own payment milestones — the owner holds back a percentage of what they owe you. A performance bond is a separate guarantee, typically issued by a bank, pledging a sum payable to the owner if the contractor defaults. For Thai SME residential contractors, retention is almost always the mechanism used: it requires no upfront arrangement with a bank and no additional cost beyond the cash-flow impact of the withheld sum. Performance bonds are typically required only by government procurement, large developers, or international clients. If a client asks for both retention and a performance bond, confirm the combined cash-flow impact before signing — carrying both on a fixed-price contract significantly tightens your working capital window.