Amended IN Senate March 26, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Senate Bill No. 61Introduced by Senator CorteseJanuary 09, 2025 An act to add Section 8811 to the Civil Code, relating to works of improvement.LEGISLATIVE COUNSEL'S DIGESTSB 61, as amended, Cortese. Private works of improvement: retention payments.Existing law generally governs retention payments withheld with respect to a contract for a private work of improvement, including by requiring an owner that withholds a retention from a direct contractor to, within 45 days after completion of the work of improvement, pay the retention to the contractor.This bill would limit the amount of a retention payment with respect to a contract for a private work of improvement by, among other things, prohibiting a retention payment withheld from a payment by an owner from the direct contractor, by the direct contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, for a private work of improvement, from exceeding 5% of the payment. payment, subject to certain exceptions. The bill would require a court to award reasonable attorneys fees to the prevailing party in any action to enforce these provisions.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 8811 is added to the Civil Code, to read:8811. (a) This section is applicable to a contract relating to a private work of improvement entered into on or after January 1, 2026.(b) (1) (A) A retention payment withheld from a payment by an owner from the direct contractor, by the direct contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, for a private work of improvement, shall not exceed 5 percent of the payment.(B) In no event shall the total retention proceeds withheld exceed 5 percent of the contract price.(C) In a contract between the direct contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention payment withheld shall not exceed the percentage specified in the contract between the owner and the direct contractor.(2) Paragraph (1) does not apply to a direct contractor or subcontractor if the direct contractor or subcontractor provides written notice to a subcontractor before, or at, the time that the bid is requested that a faithful performance and payment bond shall be required, and a subcontractor subsequently fails to furnish to the direct contractor or subcontractor a performance and payment bond issued by an admitted surety insurer.(3) Paragraph (1) does not apply to an owner, direct contractor, or subcontractor on a residential project if the project is not mixed-use and does not exceed four stories.(c) In any action to enforce the provisions of this section, a court shall award reasonable attorneys fees to the prevailing party.
Amended IN Senate March 26, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Senate Bill No. 61Introduced by Senator CorteseJanuary 09, 2025 An act to add Section 8811 to the Civil Code, relating to works of improvement.LEGISLATIVE COUNSEL'S DIGESTSB 61, as amended, Cortese. Private works of improvement: retention payments.Existing law generally governs retention payments withheld with respect to a contract for a private work of improvement, including by requiring an owner that withholds a retention from a direct contractor to, within 45 days after completion of the work of improvement, pay the retention to the contractor.This bill would limit the amount of a retention payment with respect to a contract for a private work of improvement by, among other things, prohibiting a retention payment withheld from a payment by an owner from the direct contractor, by the direct contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, for a private work of improvement, from exceeding 5% of the payment. payment, subject to certain exceptions. The bill would require a court to award reasonable attorneys fees to the prevailing party in any action to enforce these provisions.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO
Amended IN Senate March 26, 2025
Amended IN Senate March 26, 2025
CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION
Senate Bill
No. 61
Introduced by Senator CorteseJanuary 09, 2025
Introduced by Senator Cortese
January 09, 2025
An act to add Section 8811 to the Civil Code, relating to works of improvement.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
SB 61, as amended, Cortese. Private works of improvement: retention payments.
Existing law generally governs retention payments withheld with respect to a contract for a private work of improvement, including by requiring an owner that withholds a retention from a direct contractor to, within 45 days after completion of the work of improvement, pay the retention to the contractor.This bill would limit the amount of a retention payment with respect to a contract for a private work of improvement by, among other things, prohibiting a retention payment withheld from a payment by an owner from the direct contractor, by the direct contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, for a private work of improvement, from exceeding 5% of the payment. payment, subject to certain exceptions. The bill would require a court to award reasonable attorneys fees to the prevailing party in any action to enforce these provisions.
Existing law generally governs retention payments withheld with respect to a contract for a private work of improvement, including by requiring an owner that withholds a retention from a direct contractor to, within 45 days after completion of the work of improvement, pay the retention to the contractor.
This bill would limit the amount of a retention payment with respect to a contract for a private work of improvement by, among other things, prohibiting a retention payment withheld from a payment by an owner from the direct contractor, by the direct contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, for a private work of improvement, from exceeding 5% of the payment. payment, subject to certain exceptions. The bill would require a court to award reasonable attorneys fees to the prevailing party in any action to enforce these provisions.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. Section 8811 is added to the Civil Code, to read:8811. (a) This section is applicable to a contract relating to a private work of improvement entered into on or after January 1, 2026.(b) (1) (A) A retention payment withheld from a payment by an owner from the direct contractor, by the direct contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, for a private work of improvement, shall not exceed 5 percent of the payment.(B) In no event shall the total retention proceeds withheld exceed 5 percent of the contract price.(C) In a contract between the direct contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention payment withheld shall not exceed the percentage specified in the contract between the owner and the direct contractor.(2) Paragraph (1) does not apply to a direct contractor or subcontractor if the direct contractor or subcontractor provides written notice to a subcontractor before, or at, the time that the bid is requested that a faithful performance and payment bond shall be required, and a subcontractor subsequently fails to furnish to the direct contractor or subcontractor a performance and payment bond issued by an admitted surety insurer.(3) Paragraph (1) does not apply to an owner, direct contractor, or subcontractor on a residential project if the project is not mixed-use and does not exceed four stories.(c) In any action to enforce the provisions of this section, a court shall award reasonable attorneys fees to the prevailing party.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. Section 8811 is added to the Civil Code, to read:8811. (a) This section is applicable to a contract relating to a private work of improvement entered into on or after January 1, 2026.(b) (1) (A) A retention payment withheld from a payment by an owner from the direct contractor, by the direct contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, for a private work of improvement, shall not exceed 5 percent of the payment.(B) In no event shall the total retention proceeds withheld exceed 5 percent of the contract price.(C) In a contract between the direct contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention payment withheld shall not exceed the percentage specified in the contract between the owner and the direct contractor.(2) Paragraph (1) does not apply to a direct contractor or subcontractor if the direct contractor or subcontractor provides written notice to a subcontractor before, or at, the time that the bid is requested that a faithful performance and payment bond shall be required, and a subcontractor subsequently fails to furnish to the direct contractor or subcontractor a performance and payment bond issued by an admitted surety insurer.(3) Paragraph (1) does not apply to an owner, direct contractor, or subcontractor on a residential project if the project is not mixed-use and does not exceed four stories.(c) In any action to enforce the provisions of this section, a court shall award reasonable attorneys fees to the prevailing party.
SECTION 1. Section 8811 is added to the Civil Code, to read:
### SECTION 1.
8811. (a) This section is applicable to a contract relating to a private work of improvement entered into on or after January 1, 2026.(b) (1) (A) A retention payment withheld from a payment by an owner from the direct contractor, by the direct contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, for a private work of improvement, shall not exceed 5 percent of the payment.(B) In no event shall the total retention proceeds withheld exceed 5 percent of the contract price.(C) In a contract between the direct contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention payment withheld shall not exceed the percentage specified in the contract between the owner and the direct contractor.(2) Paragraph (1) does not apply to a direct contractor or subcontractor if the direct contractor or subcontractor provides written notice to a subcontractor before, or at, the time that the bid is requested that a faithful performance and payment bond shall be required, and a subcontractor subsequently fails to furnish to the direct contractor or subcontractor a performance and payment bond issued by an admitted surety insurer.(3) Paragraph (1) does not apply to an owner, direct contractor, or subcontractor on a residential project if the project is not mixed-use and does not exceed four stories.(c) In any action to enforce the provisions of this section, a court shall award reasonable attorneys fees to the prevailing party.
8811. (a) This section is applicable to a contract relating to a private work of improvement entered into on or after January 1, 2026.(b) (1) (A) A retention payment withheld from a payment by an owner from the direct contractor, by the direct contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, for a private work of improvement, shall not exceed 5 percent of the payment.(B) In no event shall the total retention proceeds withheld exceed 5 percent of the contract price.(C) In a contract between the direct contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention payment withheld shall not exceed the percentage specified in the contract between the owner and the direct contractor.(2) Paragraph (1) does not apply to a direct contractor or subcontractor if the direct contractor or subcontractor provides written notice to a subcontractor before, or at, the time that the bid is requested that a faithful performance and payment bond shall be required, and a subcontractor subsequently fails to furnish to the direct contractor or subcontractor a performance and payment bond issued by an admitted surety insurer.(3) Paragraph (1) does not apply to an owner, direct contractor, or subcontractor on a residential project if the project is not mixed-use and does not exceed four stories.(c) In any action to enforce the provisions of this section, a court shall award reasonable attorneys fees to the prevailing party.
8811. (a) This section is applicable to a contract relating to a private work of improvement entered into on or after January 1, 2026.(b) (1) (A) A retention payment withheld from a payment by an owner from the direct contractor, by the direct contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, for a private work of improvement, shall not exceed 5 percent of the payment.(B) In no event shall the total retention proceeds withheld exceed 5 percent of the contract price.(C) In a contract between the direct contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention payment withheld shall not exceed the percentage specified in the contract between the owner and the direct contractor.(2) Paragraph (1) does not apply to a direct contractor or subcontractor if the direct contractor or subcontractor provides written notice to a subcontractor before, or at, the time that the bid is requested that a faithful performance and payment bond shall be required, and a subcontractor subsequently fails to furnish to the direct contractor or subcontractor a performance and payment bond issued by an admitted surety insurer.(3) Paragraph (1) does not apply to an owner, direct contractor, or subcontractor on a residential project if the project is not mixed-use and does not exceed four stories.(c) In any action to enforce the provisions of this section, a court shall award reasonable attorneys fees to the prevailing party.
8811. (a) This section is applicable to a contract relating to a private work of improvement entered into on or after January 1, 2026.
(b) (1) (A) A retention payment withheld from a payment by an owner from the direct contractor, by the direct contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, for a private work of improvement, shall not exceed 5 percent of the payment.
(B) In no event shall the total retention proceeds withheld exceed 5 percent of the contract price.
(C) In a contract between the direct contractor and a subcontractor, and in a contract between a subcontractor and any subcontractor thereunder, the percentage of the retention payment withheld shall not exceed the percentage specified in the contract between the owner and the direct contractor.
(2) Paragraph (1) does not apply to a direct contractor or subcontractor if the direct contractor or subcontractor provides written notice to a subcontractor before, or at, the time that the bid is requested that a faithful performance and payment bond shall be required, and a subcontractor subsequently fails to furnish to the direct contractor or subcontractor a performance and payment bond issued by an admitted surety insurer.
(3) Paragraph (1) does not apply to an owner, direct contractor, or subcontractor on a residential project if the project is not mixed-use and does not exceed four stories.
(c) In any action to enforce the provisions of this section, a court shall award reasonable attorneys fees to the prevailing party.