CO HB1162

Limits retainage (money withheld to ensure satisfactory work completion) to 5% of calculated work value for the first 50% of private commercial construction projects exceeding $150,000, and 2.5% for the remaining 50% of work.

Requires building clients to deposit retainage in interest-bearing escrow accounts accessible only through arbitration or court order, with 15% annual interest penalty if funds are not properly deposited.

Mandates contractors forward subcontractor payments within 7 days and building clients release all retainage plus accrued interest within 30 days after project completion, with 15% annual penalty for violations.

Allows contractors and subcontractors to provide substitute security (letters of credit, retainage bonds, or certificates of deposit) to have retainage released immediately.

Applies similar retainage limits and payment requirements to public entity construction contracts; failure to comply subjects violators to mechanics' liens and compounded daily interest penalties.