How much can a contractor ask for up front in California?

Avoid paying in cash. Contractors cannot ask for a deposit of more than 10 percent of the total cost of the job or $1,000, whichever is less. * (This applies to any home improvement project, including swimming pools.) Stick to your schedule of payments and don’t let payments get ahead of the completed work.

Is it legal to withhold payments from a contractor?

However, under most contracts with a fixed payment structure, it is likely that you are legally required to make the payments even if the contractor has not performed all of its obligations under the contract.

When do you have to pay a contractor in California?

1. Deadline: An owner must pay a direct contractor within 30 days after notice demanding payment pursuant to the contract. (Civil Code §8800) 2. Waivable: Yes, waivable in writing. (Civil Code §8800) 3.

Can a general contractor fail to pay a subcontractor?

California has passed specific statutes to protect the subcontractors from failure of the general contractor…or other subcontractors…to pay out monies they have received from the owner for work completed and materials installed by the contractor. CA Business & Professions Code

What is the penalty for withholding payment in California?

Penalty: If a direct contractor or subcontractor wrongfully withholds a progress payment the direct contractor or subcontractor is liable for prompt payment penalties of 2% per month and discipline by the California Contractors State License Board.

How much retainage can a contractor withhold in California?

California does not restrict the retainage that can be withheld from a contractor on commercial or residential jobs. It is customary to withhold between 0%-10% as retainage. Retainage withheld from a direct contractor must be released by 45 days from the “date of completion.”

Can a contractor withhold payment from a subcontractor?

In most cases, you can’t legally withhold payment from a subcontractor when the job you’ve been contracted on fails to pay on time or, even worse, doesn’t pay at all. You’re still responsible for making sure your subcontractors are paid.

When does the contractor law change in California?

CALIFORNIA CONTRACTORS LICENSE LAW & REFERENCE BOOK vii SUMMARY OF MAJOR CHANGES TO CONTRACTOR LAW EFFECTIVE JANUARY 1, 2018 unless indicated otherwise AB 92 (Bonta) Amends Sections 7201 and 10261 of the Public Contract Code, relating to public contracts