Florida General Contractor Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Florida General Contractor Exam. Study with flashcards and multiple choice questions, each question includes hints and explanations. Get exam-ready now!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What percentage of contract retainage is commonly waived in construction contracts?

25%
50%
75%
100%

The correct answer is: 50%

In construction contracts, it is common for a percentage of the payment to be retained until project completion to ensure that the contractor fulfills their obligations and addresses any deficiencies. The industry standard for contract retainage often hovers around 5% to 10%, but in some cases, it may be as high as 50%. Choosing to waive 50% of the retainage means that half of the retained funds are released to the contractor upon reaching certain milestones or upon satisfying specific conditions within the contract. This approach can expedite cash flow for the contractor while still providing the owner with a safeguard against failures or incomplete work. However, it's critical that the contract clearly delineates the terms of the retainage and waivers to avoid confusion over payments and project completion expectations. This practice fosters trust and ensures that both parties have clarity on financial transactions related to project performance and outcomes. In many contexts, a full waiver of retainage might not be practical or advisable, as it could disincentivize the contractor from addressing outstanding issues.