MS HB1048

Authorizes contracts between owners and contractors to include retainage provisions, limiting withheld amounts to no more than 5% of the gross contract price, applicable to subcontracts and sub-subcontracts.

Requires owners to deposit retainage in a separate, interest-bearing FDIC-insured escrow account within three business days, with all associated fees paid by the owner.

Mandates owners notify contractors in writing upon deposit, including the financial institution name, account number, and total retainage amount; contractors must forward this notice to affected subcontractors within ten days.

Establishes procedures for releasing retainage upon work completion: undisputed amounts released within three business days upon signed request; disputed amounts released only after court order or arbitration award, with prevailing parties entitled to attorney's fees.

Imposes a $500 per day penalty on owners who fail to deposit retainage within three business days; applies mandatory compliance that cannot be waived by contract; effective July 1, 2015.