What is the term for the funds withheld by the owner until project completion?

The term "retainage" refers specifically to the funds that are withheld by the owner or client until the completion of a project. This practice is common in construction and contract work, serving as a financial incentive for contractors to complete the job satisfactorily and adhere to the terms of the contract. By withholding a portion of the payment, the owner ensures that the contractor is motivated to finish the project on time and to the agreed-upon specifications.

In contrast, the other terms mentioned do not accurately describe this practice. "Withholding allowance" typically relates to individual tax withholdings rather than construction contracts. A "retainer" usually refers to a fee paid in advance to secure services from a professional, such as a lawyer, and does not involve withholding for project completion. "Escrow" pertains to funds held by a third party until certain conditions are fulfilled but is distinct from the concept of retainage, which is specifically tied to project completion and quality assurance.