One total, or several pay applications: calculate the retention guarantee (5% maximum) on a French works contract, its release deadline, and whether a bank guarantee would cost less than holding the cash.
Check the rate set in your contract — it can be lower than 5%, never higher.
5% maximum of the total works amount, on both private and public contracts. On private contracts, this cap comes from loi n°71-584 of 16 July 1971, a public-order statute — no contract clause can set it higher.
At the latest one year after the completion (réception) date, if no defects were noted or all noted defects have been resolved. Past that deadline with no dispute, the retention must be released in full to the contractor.
It depends on your bank's fee versus your own cost of capital. A bank guarantee (garantie à première demande) has an annual fee (commonly 0.5-2%) charged on the guaranteed amount regardless of what you do with the freed-up cash. Cash retention has no fee, but ties up money for about a year that could otherwise earn a return or reduce financing costs elsewhere. Compare your own bank's quoted fee against your real cost of capital — this calculator does the arithmetic once you enter both.
The portion of the retention corresponding to the defective work can be held beyond the one-year deadline until the defects are actually resolved. The portion unrelated to any defect still has to be released on the normal schedule.
Tracking a retention guarantee starts with accurate pay applications. Mirage helps construction companies keep their monthly pay applications and contractual tracking reliable through to completion.
See Pay Applications