House Bill 21-1167 Summary

• Limits retainage (money withheld as assurance of satisfactory work completion) to a maximum of 5% of contract price for private construction projects in Colorado.

• Applies to construction contracts valued at $150,000 or more between property owners and contractors, as well as subcontracts and supply agreements for those projects, with exceptions for single-family and small multifamily residential construction.

• Prohibits contractors and subcontractors from withholding more than 5% of completed work price, though payment timing, performance requirements, backcharges, and conditions precedent remain unaffected.

• Permits contractors to condition payment to subcontractors on actual receipt of payment from property owners, and subcontractors to condition payment to subsequent subcontractors on actual receipt from contractors.

• Becomes effective 90 days after the 2021 legislative session ends, or if subject to a referendum petition, only upon voter approval at the November 2022 general election.