What Is a Retainer in Conveyancing?

When you sell a property, you expect to receive your sale proceeds on completion day. In most transactions, that is exactly what happens. But sometimes your solicitor will hold back a portion of those proceeds after completion — a practice known as a retainer or retention.

If your solicitor has mentioned a retention on your sale, or you have seen the term on your completion statement, this guide explains what it means, why it happens, how much is typically held, and what your rights are as a seller. This guide covers property sales in England and Wales.

What is a retainer in conveyancing?

A retainer (more commonly called a retention in modern conveyancing practice) is a sum of money held back from the seller's sale proceeds by the solicitor after completion. The funds sit in the solicitor's client account until a specified condition is satisfied.

The purpose is to protect the buyer. If there is an outstanding issue that could affect the property — for example, a missing certificate or work that needs completing — the retention gives the buyer financial security. If the seller resolves the issue as agreed, the retained funds are released back to the seller. If not, the money can be used to address the problem.

Retentions are not uncommon. They arise in a meaningful minority of transactions, particularly where older properties are involved or where there are gaps in the property's paperwork. Your solicitor will explain if a retention is being proposed and advise you on whether the terms are reasonable.

When are retentions used?

Retentions typically arise when there is an identified issue that both parties agree should be resolved after completion rather than before. The most common scenarios include:

Missing documents and certificates

This is the single most common reason for a retention. If the seller cannot produce a required document before completion, the buyer's solicitor may agree to proceed with a retention in place. Typical missing documents include:

• Building regulations completion certificates — for work such as a loft conversion, extension, or replacement windows where the certificate was never obtained or has been lost
• Planning permission approvals — where alterations were made that required planning consent but documentation is missing
• Electrical or gas safety certificates — particularly for work carried out by previous owners
• FENSA certificates — for replacement windows or doors installed after April 2002
• Guarantees and warranties — such as damp proofing, timber treatment, or roofing guarantees

Outstanding remedial work

If the buyer's survey has identified defects that the seller has agreed to fix before or shortly after completion, a retention ensures the seller follows through. Examples include repairing a faulty boiler, addressing damp issues, or completing unfinished building work. The retention amount is usually based on the estimated cost of the repairs plus a contingency margin.

Indemnity insurance requirements

Sometimes a retention is held while an indemnity insurance policy is arranged. If there is a defect in the title or a missing document that cannot practically be obtained, an indemnity policy can protect the buyer (and their mortgage lender) against the financial risk. The retention covers the cost of the policy and is released once it is in place.

Boundary or access issues

Where there is an unresolved boundary dispute or an access arrangement that needs formalising (such as a right of way over neighbouring land), a retention may be held while the matter is dealt with legally. These retentions can be larger and take longer to resolve.

Outstanding lease or management company matters

For leasehold properties, retentions sometimes arise where there are outstanding service charges, unresolved disputes with the freeholder, or issues with the management company that have not been finalised by completion day.

How much is typically retained?

The amount of the retention depends on the nature and severity of the outstanding issue. Here are typical ranges:

The retention amount should be proportionate to the cost of resolving the issue. In practice, it is usually set at the estimated cost of the work or document plus a margin of 10% to 25% to cover unexpected additional costs. If you believe the proposed retention is excessive, your solicitor can negotiate on your behalf.

How retentions appear on the completion statement

A retention is shown as a deduction on the seller's completion statement. It appears alongside other deductions such as:

• Mortgage redemption figure
• Solicitor fees and disbursements
• Estate agent fees

A typical entry might read:

The retention is deducted before the remaining balance is transferred to your bank account. Once the condition is met and the retention is released, the held funds are transferred to you separately. For more on how to read your completion statement, see our completion statement guide.

How long do retentions last?

There is no statutory time limit for how long a retention can be held. However, the retention agreement between the parties should specify a clear timeframe. In most cases:

• Simple retentions (missing documents, indemnity policies) are typically resolved within one to three months after completion
• Moderate retentions (remedial work, certificate applications) usually take three to six months
• Complex retentions (boundary disputes, planning issues) can take six to twelve months or longer

The retention agreement should include a longstop date — a final deadline after which the retention is dealt with regardless of whether the condition has been met. This prevents funds being held indefinitely. If no longstop date has been set, ask your solicitor to negotiate one before you agree to the retention.

What happens between exchange and completion with a retention?

Retentions are usually agreed between exchange and completion, or sometimes as a condition of exchange itself. During this period, the solicitors for both sides negotiate the retention terms, including:

• The exact amount to be retained
• The specific condition that must be satisfied for release
• The deadline for satisfying the condition
• What happens if the condition is not met (e.g. funds forfeited, indemnity policy purchased, or matter referred for resolution)
• Which solicitor holds the retained funds

It is important that all of this is agreed and documented in writing before completion. A verbal agreement or vague understanding is not sufficient — it leaves both parties exposed if there is a dispute later.

Your rights regarding retained funds

As a seller, you have several important rights when a retention is proposed:

Right to a written agreement

You are entitled to have the retention terms set out in writing. This is typically done through a solicitor's undertaking or a retention agreement signed by both parties. The document should clearly state the amount, the conditions for release, the timeframe, and the consequences if the condition is not met.

Right to a proportionate amount

The retention should reflect the reasonable cost of resolving the issue. If the buyer's solicitor proposes a retention of £5,000 for a missing certificate that could be replaced for £300 (or covered by a £150 indemnity policy), your solicitor should challenge this as disproportionate. You are not obliged to accept an unreasonable retention figure.

Right to interest on retained funds

Under the SRA Accounts Rules, solicitors must pay a "fair sum" of interest on client money held in their client account. In practice, whether you receive meaningful interest depends on the amount held and the duration. Many firms have a minimum threshold (often £500 to £1,000 held for at least a few weeks) before interest becomes payable. With relatively small retentions held for short periods, the interest may be negligible. Nevertheless, you have the right to ask about the firm's interest policy.

Right to prompt release

Once you have satisfied the condition for releasing the retention, your solicitor should transfer the funds to you promptly. The SRA expects solicitors to return client money without undue delay once the purpose for holding it has been fulfilled. If your solicitor is slow to release funds after you have met the conditions, raise a formal complaint with the firm and, if necessary, escalate to the Legal Ombudsman.

SRA rules on holding client money

Retained funds are classified as client money under the SRA Accounts Rules. This means they are subject to strict regulatory requirements:

• Separate accounts: Client money must be held in a designated client account, completely separate from the firm's own money (the "office account").
• Accurate records: The solicitor must maintain accurate and up-to-date records of all client money, including retentions.
• No unauthorised use: The retained funds must not be used for any purpose other than that agreed with the client. A solicitor cannot use one client's retained funds to cover shortfalls for another client.
• Annual accountant's report: Firms holding client money must submit an annual report from a qualified accountant confirming compliance with the SRA Accounts Rules.
• Prompt return: Client money must be returned promptly once the purpose for holding it no longer applies.

You can verify that your solicitor is properly regulated by checking the SRA register. If you have concerns about how your money is being held, the SRA has a consumer complaints process.

Common reasons for retention: a closer look

To help you understand what might trigger a retention on your sale, here are the most frequently encountered scenarios in more detail:

Missing building regulations sign-off

This is by far the most common reason. If work was carried out on the property — a loft conversion, kitchen extension, removal of a structural wall, or replacement of windows — and the building regulations completion certificate is missing, the buyer's solicitor will flag it. The options are usually to apply for a regularisation certificate from the local authority (which can take weeks and costs £200 to £800), obtain an indemnity insurance policy (faster and cheaper at £50 to £300), or agree a retention while the matter is resolved.

Restrictive covenants on the title

If the property's title contains a restrictive covenant that may have been breached (for example, a covenant against building on a specific part of the land, where an extension now stands), the buyer's solicitor may request a retention while an indemnity policy is arranged or while further enquiries are made.

Outstanding planning enforcement risk

If alterations have been made without planning permission and the four-year enforcement period (or ten years for change of use) has not yet expired, the buyer faces a risk that the local authority could require the work to be undone. A retention protects the buyer while the enforcement period runs out or while a certificate of lawfulness is obtained.

Incomplete or defective drainage connections

If the drainage search reveals that the property is not properly connected to the mains sewer, or if there is an unresolved issue with shared drainage, a retention may be held while the seller arranges for the connection to be corrected or formalised.

How to get retained funds released

The process for releasing a retention is straightforward, but it requires you to take active steps:

1. Identify what you need to do. Refer to the written retention agreement for the exact condition you must satisfy. This might be obtaining a certificate, completing remedial work, or providing evidence that an indemnity policy has been arranged.
2. Complete the required action. Obtain the document, arrange the work, or take whatever step is needed. Keep records of everything — receipts, certificates, confirmation letters.
3. Provide evidence to your solicitor. Send copies of the relevant documentation to your solicitor, who will forward them to the buyer's solicitor for approval.
4. The buyer's solicitor confirms satisfaction. Once the buyer's solicitor is satisfied that the condition has been met, they will authorise release of the retained funds.
5. Funds are transferred to you. Your solicitor releases the retained amount to your bank account, usually via a CHAPS transfer (which may incur a further bank transfer fee of £25 to £50).

The entire process from satisfying the condition to receiving the funds typically takes one to four weeks, depending on how quickly both solicitors act. If there are delays, chase your solicitor and ask for a specific timeline.

Retentions vs price reductions

When an issue is identified during conveyancing, the buyer has several options: request a retention, negotiate a price reduction, or pull out of the sale. Understanding the difference between a retention and a price reduction is important:

From a seller's perspective, a retention is generally preferable to a price reduction because you have the opportunity to recover the full amount. However, it does require you to take action after completion, and there is a risk of losing the funds if you fail to satisfy the condition.

Tips for sellers facing a retention

If a retention has been proposed on your sale, here is how to protect your position:

• Get everything in writing. Never agree to a retention based on a verbal understanding. Insist on a formal written agreement that specifies the amount, condition, deadline, and consequences.
• Challenge disproportionate amounts. If the proposed retention is significantly more than the likely cost of resolving the issue, ask your solicitor to negotiate it down. A retention of £5,000 for a £200 indemnity policy is not reasonable.
• Set a realistic but firm deadline. Make sure the retention agreement includes a longstop date. Three months is reasonable for most document-related retentions; six months for remedial work.
• Act quickly after completion. The sooner you satisfy the condition, the sooner you get your money. Do not let the retention drift — start working on the outstanding matter immediately after completion day.
• Keep your solicitor informed. Update your solicitor on your progress. If you encounter unexpected difficulties, let them know early so they can manage the buyer's expectations and, if necessary, negotiate an extension of the deadline.
• Understand the cost implications. Factor the retention into your financial planning. The retained funds will not be available to you until the condition is met, which could affect your plans if you are relying on the full sale proceeds for a simultaneous purchase. Review our conveyancing costs breakdown to understand all the deductions from your sale proceeds.

Can you avoid a retention altogether?

The best way to avoid a retention is to address potential issues before they become a problem. Here are practical steps:

• Gather your documents early. Before you list your property, collect all building regulations certificates, planning approvals, FENSA certificates, electrical certificates, gas safety records, and guarantees. If anything is missing, you have time to obtain replacements or arrange indemnity insurance before a buyer is involved.
• Complete your TA6 form honestly and thoroughly. The more transparently you disclose issues upfront, the fewer surprises will emerge during the buyer's solicitor's enquiries. Our guide on what your solicitor actually does explains the enquiry process in detail.
• Address remedial issues before listing. If you know about a damp problem, a faulty boiler, or incomplete building work, consider fixing it before you put the property on the market. It is cheaper and less stressful to deal with these issues on your own timeline than under the pressure of a live transaction.
• Consider upfront legal preparation. Services like Pine help sellers get "sale-ready" before listing by completing legal forms and ordering searches in advance. This proactive approach surfaces potential issues early, giving you time to resolve them before they become retention triggers.

What if you disagree with a retention?

If the buyer's solicitor proposes a retention that you believe is unnecessary or excessive, you have options:

1. Negotiate the amount. Your solicitor can counter-propose a lower figure based on the actual cost of resolving the issue.
2. Offer an alternative solution. Instead of a retention, you might offer to purchase an indemnity insurance policy before completion, provide the missing document within a specific timeframe, or agree to a small price reduction.
3. Refuse the retention. You can refuse, but be aware that this may cause the buyer to delay completion or, in the worst case, withdraw from the sale. Your solicitor will advise you on the likely consequences based on the specific circumstances. For more on what can happen during this critical period, see our guide on what happens between exchange and completion.

Retentions and the deposit: what is the difference?

Sellers sometimes confuse a retention with the deposit held by the solicitor between exchange and completion. They are distinct concepts:

• The deposit (usually 10% of the purchase price) is paid by the buyer on exchange of contracts as a commitment to complete the purchase. It is held by the seller's solicitor (or a stakeholder) until completion. For a detailed explanation, see our guide on the solicitor-held deposit.
• A retention is money deducted from the seller's proceeds after completion, held in the solicitor's client account until a specific post-completion condition is met.

The deposit protects the buyer if the seller fails to complete. The retention protects the buyer against a specific outstanding issue with the property. Both involve money held by a solicitor, but they serve different purposes and apply at different stages of the transaction.

Sources and further reading

• SRA Accounts Rules (Solicitors Regulation Authority)
• Check a Solicitor's Record (Solicitors Regulation Authority)
• Report a Problem with a Solicitor (Solicitors Regulation Authority)
• Legal Ombudsman (for complaints about legal service)
• Conveyancing Protocol (The Law Society)
• Building Regulations Approval (GOV.UK)
• Conveyancing Fees: What to Expect (HomeOwners Alliance)

Frequently asked questions