§ 8800 Contractor Payment Dispute Rules

• •If you hire someone to do work (like build a house) and you agree on payments, you must pay them within 30 days of getting their bill. No excuses unless you both agreed to something else in writing.
• •If you and the worker disagree about how much they should be paid, you can hold back some money—but no more than 1.5 times the amount you’re arguing about.
• •If you don’t pay on time or hold back too much money, you’ll owe extra money (2% per month) as a penalty, and the worker can make you pay their lawyer fees if they sue you to get their money.
• •This rule doesn’t change other rules about holding back a small percentage of the total payment until the job is fully done.

You hire a contractor to build a new kitchen. The contract says you’ll pay them $10,000 after they finish the first half of the work. They finish and send you a bill for $10,000.

You have 30 days to pay them the $10,000. If you don’t pay on time, they can charge you an extra 2% per month on the $10,000 until you pay. If you think they did a bad job and only deserve $8,000, you can hold back up to $3,000 (which is 1.5 times the $2,000 you’re arguing about) while you sort it out. If you hold back more or don’t pay at all, you’ll owe penalties and might have to pay their lawyer fees if they take you to court.