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Security Deposit and FDR Release

Security deposit is deducted from every running bill and released long after the work ends. A great deal of contractor money sits unclaimed in exactly this place.

How it accumulates without you noticing

Security deposit is not paid as a lump sum. It is deducted as a percentage from each running account bill through the life of the contract, and it stays with the department until the defect liability period ends and the work is formally closed.

Because it is deducted a little at a time, contractors underestimate the total. Across several contracts over several years, the accumulated amount held by departments can be substantial — and much of it is claimable but unclaimed, because the contract finished, the site team moved on, and nobody went back for it.

If you have completed works from three or four years ago, it is worth listing them and checking what is still held. This is the most reliably overlooked money in contracting.

What release needs

1

The defect liability period has to be over

This runs from completion, and its length is in the contract. Nothing is released before it ends.

2

Work formally closed

Completion certificate issued, final bill settled, and no outstanding claims from the department.

3

A written application

Release is not automatic. The department acts on a request, with the supporting documentation attached.

4

Affidavit or undertaking where required

Many departments require a declaration that no dues or claims remain outstanding, in their own format.

5

Follow-up

The unglamorous part, and usually the part that decides whether it actually arrives.

Written 5 September 2026. Government requirements and portal behaviour change — message us to confirm before you rely on any date or figure here.

A practical suggestion

Keep a single list of every completed contract, the security deposit held against it, the defect liability end date, and whether release has been claimed. It takes an afternoon to build and it turns invisible money into a schedule you can act on.

If you would rather not build it yourself, send us your completed work details and we will put it together and tell you what is claimable now.

Common questions

It is stated in the contract and varies by work type. Roads, buildings and specialised works differ. Check the contract rather than assuming a standard figure.

Then that has to be resolved before release. Establish what the claim is in writing — sometimes it is an accounting issue rather than a substantive dispute, and those clear quickly once identified.

Usually not, though older cases take more chasing and more documentation. Worth pursuing given the amounts involved.

Yes. Department follow-up is one of our services and this is a common use of it.

Send us your case

Send us your completed contracts and their dates. We will work out what should already have been released and what it takes to get it.

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