What does California’s prompt payment law require on private construction?

In California, unless agreed otherwise in writing, an owner pays a direct contractor an undisputed progress payment within 30 days after a notice demanding payment, a contractor pays a subcontractor within seven days after receiving each progress payment, and a late payment carries a penalty of 2% a month. In a good faith dispute, the owner or contractor may withhold no more than 150 percent of the disputed amount. An owner that withholds a retention must pay it to the direct contractor within 45 days after completion of the work of improvement. The subcontractor rule applies to all private works of improvement and to public works except where Public Contract Code section 10262 applies. In an action to collect an amount wrongfully withheld, the prevailing party recovers costs and a reasonable attorney’s fee. A written contract can set its own payment terms where the statute allows. This is Cal. Civ. Code §§ 8800, 8812; Cal. Bus. & Prof. Code § 7108.5.

WhatCalifornia
Payment deadlineOwner 30 days after demand; sub 7 days; 2% a month
Who this coversPrivate construction, not only public works

What the statute says

“… the owner shall pay the direct contractor, within 30 days after notice demanding payment pursuant to the contract is given, any progress payment due as to which there is no good faith dispute between them …”

Quoted word for word from the section’s text.

Source

Cal. Civ. Code §§ 8800, 8812; Cal. Bus. & Prof. Code § 7108.5

Read the statute in the California Codes (California Legislative Information): leginfo.legislature.ca.gov.

Checked against the statute on November 15, 2026.

This is a summary of a published statute, not legal advice. Rules change, local ordinances can add to them, and the terms of a specific lease may differ. Check the citation and speak to a lawyer before acting.

How Seayora uses this rule

A contractor on Seayora keeps every job’s dates, its estimate, its invoices and its payments in one record, so the date work was last performed, the date each invoice went out and the amount still owed are on file when a lien or payment deadline is counted.

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