How much retainage can be withheld on a construction project in Arizona?
Last reviewed July 5, 2026
In Arizona, retainage is generally capped at 5% of the contract amount for construction projects. However, for projects over $1 million, the owner can retain up to 10% until substantial completion is achieved, then it can drop to 5%.
Key points
- Standard retainage is 5% in Arizona.
- For projects over $1 million, initial retainage can be 10%.
- Retainage can decrease to 5% after substantial completion.
The retainage rules in Arizona are meant to protect the owner and ensure project completion. Be aware that these percentages can vary based on the specific contract terms and the nature of the work. Always refer to your contract and consult state statutes for any updates or changes.
How Alloovium helps
Alloovium can help track retainage amounts and compliance with Arizona's regulations.
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General information for US construction professionals — not legal advice. Lien deadlines, retainage caps and notice rules vary by state; verify with the state statute or a construction attorney.