Retention.
San José Municipal Code § 27.26.060
in effect27.26.060 - Retention.
A. Public Works Contracts will include appropriate provisions for the withholding of retention from payments made by the City of the Contractor.
B. In accordance with California Public Contract Code Section 7201, as it may be amended, Public Works Contracts will not require retention to exceed five percent (5%) of a progress payment or total retention to exceed five percent (5%) of the contract price unless:
1. Before the procurement, the City makes a written finding that the improvement being constructed is substantially complex and therefore requires a higher retention than five percent (5%); and
2. The City includes in the procurement documents details explaining the basis for the finding and the actual retention amount.
C. In accordance with California Public Contract Code Section 22300, as it may be amended, Public Works Contracts will allow a Contractor to substitute securities for retention or to require the City to pay retention directly to an escrow agent.
D. Subject to the City's right to make withholdings in accordance with Section 27.26.070, Public Works Contracts will require the release of retention to the Contractor following substantial completion of the work but not later than sixty (60) Calendar Days following the acceptance of the completed work by the City:
1. Nothing in this Subsection D precludes a Public Works Contract that expressly provides for the City's acceptance of one or more portions of work before substantial completion of the entire project from expressly providing for the earlier release of retention related to the portion(s) of work accepted.
2. The untimely release of retention will not be subject to interest, attorney's fees or costs.
(Ord. 30540.)
Source: City of San José, Municipal Code (Municode Library, library.municode.com)URL: https://library.municode.com/ca/san_jose/codes/code_of_ordinances?nodeId=TIT27PRPUWO_CH27.26CO_27.26.060REFetched: 11/1/2026