Payment Recovery & Collections. Know your rights under California law.
Comprehensive legal information about payment recovery & collections in California commercial and residential construction projects.
Comprehensive legal information about payment recovery & collections in California commercial and residential construction projects.
Overview
Comprehensive legal information about payment recovery & collections 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 payment recovery & collections
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Use the free tool →Your Rights Under California Law
Both property owners and contractors in California hold significant rights under state construction statutes.
Property owner rights
Owners are entitled to construction meeting building codes, the approved plans, and Civil Code § 896 standards. When the work fails on those standards, owners can pursue repair-cost recovery, diminished value, and other damages.
Contractor rights
Contractors are entitled to be paid on time — a right reinforced by SB 440 (2% per month interest on late payments) and SB 61 (5% retention cap). Licensed contractors can also assert mechanic’s liens, stop notices, and bond claims.
Key statute
How California Law Applies
The legal standards for payment recovery & collections 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
Document priorities: 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 payment recovery & collections claim?
Limitations periods vary by claim. Contract claims run 4 years; negligence claims run 3 years from discovery; latent-defect claims have a 10-year statute of repose. Confirm any deadline applicable to your case with an attorney.
Do I need a lawyer for payment recovery & collections?
Construction law is procedurally complex and unforgiving on deadlines. An experienced construction attorney can evaluate the claim, manage notice and pre-litigation requirements, and represent you in mediation, arbitration, or litigation.
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