Recovering Money from a Contractor. Know your rights under California law.
Comprehensive legal information about recovering money from a contractor in California commercial and residential construction projects.
Comprehensive legal information about recovering money from a contractor in California commercial and residential construction projects.
Overview
Comprehensive legal information about recovering money from a contractor in California commercial and residential construction projects.
California construction law gives owners, contractors, and subcontractors structured protections. The statutes, deadlines, and procedures are central whether you’re prosecuting a claim, defending one, or staying compliant with a contract.
Steps for handling recovering money from a contractor
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Use the free tool →Your Rights Under California Law
California construction law gives property owners and contractors meaningful rights.
Property owner rights
Owners are entitled to construction that conforms to building codes, approved plans, and the Civil Code § 896 standards. When the work falls short, owners can bring claims for repair cost, diminished value, and other damages.
Contractor rights
Contractors have a right to timely payment. SB 440 attaches 2% monthly interest to late payments and SB 61 caps retention at 5%. Licensed contractors can also use mechanic’s liens, stop notices, and bond claims.
Key statute
How California Law Applies
The legal standards for recovering money from a contractor are established by California statute, building codes, and case law. Key statutes include Civil Code §895 et seq. (Right to Repair), Civil Code §8400 et seq. (mechanic's liens), BPC §7031 (contractor licensing), and the new SB 440 and SB 61 provisions effective 2026.
The Legal Process
The standard California pathway is pre-litigation notice and inspection, then mediation, then — only if needed — litigation or arbitration. The specific track depends on the type of claim and what the contract requires.
What Documentation Matters
Among the key documents are the construction contract, change orders, payment records, inspection reports, correspondence, photographs of defective work, building permits, and expert reports.
Frequently Asked Questions
How long do I have to file a recovering money from a contractor claim?
Each claim type carries its own deadline. Contract: 4 years. Negligence: 3 years from the discovery date. Latent defect: 10-year statute of repose. An attorney can verify the deadlines for your specific facts.
Do I need a lawyer for recovering money from a contractor?
Construction law combines complex procedure with hard deadlines. Experienced construction counsel evaluates the claim, ensures notice and pre-litigation compliance, and represents the client in mediation, arbitration, or litigation.
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