Contractor Disputes FAQ

When a contractor performs poor quality work in California, you have several legal options to pursue compensation and remediation. First, document the deficient work thoroughly with photographs, videos, and written descriptions. Obtain written assessments from other licensed contractors or experts about what work does not meet industry standards.

Your primary legal remedies include breach of contract, as the contractor agreed to perform work meeting certain standards, and failing to do so breaches the agreement. You may recover the cost to repair or complete the work properly. Under Business and Professions Code Section 7109, willful departure from accepted trade standards without homeowner consent is a cause for disciplinary action. You can file a complaint with the Contractors State License Board, which may result in license discipline and help you recover from the contractor's bond.

When a contractor demands more money than the original contract price in California, your rights depend on the reason for the increase and compliance with applicable laws. For home improvement contracts, Business and Professions Code Section 7159 requires that the contract include the total price and prohibits extras or change orders unless agreed to in writing and signed by the property owner.

If the contractor is demanding payment for work not covered by change orders, you may refuse to pay for unauthorized extras. However, legitimate change orders for additional work you requested or approved in writing are enforceable. Review your contract carefully for provisions about price changes, allowances, and unforeseen conditions. If the contractor is threatening to stop work or file a lien over disputed amounts, document the dispute in writing and consider consulting an attorney.

If your contractor stops showing up to work in California, take immediate steps to protect your rights and property. First, document the situation by noting the date work stopped, the status of the project, and photographing the current condition. Send written notice to the contractor at their address of record, stating that they have not appeared for work since a specific date and requesting they immediately resume work or provide a written explanation.

If the contractor does not respond or resume work within a reasonable time, send a formal notice of default citing breach of contract and stating your intent to terminate if work does not resume. Under Business and Professions Code Section 7107, abandonment of a project without legal excuse is a cause for disciplinary action. File a complaint with the Contractors State License Board, which can investigate and potentially help you recover from the contractor's bond.

Yes, California law generally allows you to withhold payment reasonably related to incomplete or defective work, but the specifics depend on your contract terms and the nature of the deficiency. Most construction contracts include progress payment provisions requiring payment as work reaches certain stages, and you may withhold payment for stages not properly completed.

Under Civil Code Section 8800 and related retention provisions, property owners may retain a portion of each progress payment, typically ten percent, as security for proper completion. Document all deficiencies in writing and provide the contractor reasonable opportunity to cure before withholding payment. Be aware that contractors may respond to withheld payments by recording a mechanics lien under Civil Code Section 8400, which creates a cloud on your property title.

California has several statutes of limitations that may apply to construction disputes, depending on the nature of the claim. For written contract claims, the limitation period is four years under Code of Civil Procedure Section 337, running from the date of breach. For oral contracts, it is two years under Section 339. For fraud claims, the limitation is three years under Section 338.

For construction defect claims specifically, California has special statutes of repose under Civil Code Sections 895-945.5, commonly known as the Right to Repair Act or SB 800. For patent, or visible, defects, claims must be brought within four years after substantial completion. For latent, or hidden, defects, the period is ten years after substantial completion under Code of Civil Procedure Section 337.15. It is crucial to act promptly when you discover a construction problem because waiting too long can forfeit your rights entirely.

To file a complaint against a contractor with the California Contractors State License Board, you can submit a complaint online through the CSLB website, by mail, or in person at a CSLB office. Your complaint should include your name and contact information, the contractor's name, license number, and contact information, a detailed description of the problem including dates and amounts paid, copies of the contract and other documentation, and photographs of defective work if applicable.

After receiving your complaint, the CSLB will evaluate whether it falls within their jurisdiction. If accepted, an investigator will contact you and may inspect the work, interview parties, and review documentation. The CSLB can order corrective action, impose discipline including license suspension or revocation, facilitate recovery from the contractor's bond, and refer cases for criminal prosecution in serious cases.

California requires licensed contractors to maintain a contractor's license bond under Business and Professions Code Section 7071.6, currently set at $25,000 for most contractors. This bond protects homeowners and others who suffer damages due to contractor violations.

To make a claim against a contractor's bond, you must first identify the bonding company on the CSLB website by searching the contractor's license number. File a written claim with the bonding company describing your damages and providing supporting documentation. The bonding company will investigate your claim and the contractor will have an opportunity to respond. Bond funds are limited and multiple claimants may be competing for the same bond, so claims are paid in order of filing. The Contractors State License Bond Fund may provide additional recovery for some claims.

If a contractor files a mechanics lien on your California property, you have several options to address it. First, verify the lien's validity by checking that the contractor was properly licensed, provided required preliminary notices, recorded the lien within 90 days after completion, and the amount claimed is accurate.

If you believe the lien is improper, you can file a petition to release the lien under Civil Code Section 8480. You may also post a release bond under Civil Code Section 8424, which substitutes a bond for the lien. Negotiate directly with the contractor to resolve the underlying dispute. The lien must be enforced by lawsuit within 90 days of recording under Civil Code Section 8460, or it expires.

Yes, California small claims court is often an efficient venue for construction disputes within its jurisdictional limits. Individuals can sue for up to $12,500, while businesses are limited to $6,250 under Code of Civil Procedure Section 116.221. Contractors can also sue homeowners in small claims court.

Small claims court is advantageous because no attorneys are allowed to represent parties, filing fees are modest, hearings are relatively quick, and procedures are informal. To prepare your case, gather all relevant documents including the contract, change orders, payment records, photographs of defective work, written communications, and estimates from other contractors for repair costs. For claims exceeding small claims limits, you will need to file in civil court.

A well-drafted construction contract protects California homeowners by clearly defining the parties' rights and obligations. For home improvement contracts, Business and Professions Code Section 7159 mandates specific terms that must be included. Beyond legal requirements, protective provisions include a detailed scope of work specifying exactly what will be done, materials to be used, and standards to be met.

Include a fixed price or clear pricing mechanism with provisions for how changes will be priced and approved in writing. Establish a realistic project timeline with milestone dates for progress payments. Require lien releases from all subcontractors and suppliers with each progress payment. Include warranty provisions and address permit responsibility. Never sign a contract with significant blank spaces, and never pay more than ten percent down or $1,000, whichever is less.