§ 11936 Security Replenishment Requirement

This law says that if the money or guarantee (called “security”) you had to keep drops below $25,000 because something was taken from it, you must add more money so it’s at least $25,000 again.

Key Takeaways

•Security must never drop below $25,000.
•If any part of the security is taken away, you have to top it up.
•You only add enough to bring the total back up to $25,000, not more.

Example

A contractor had to keep a $30,000 security deposit for a building project. The city later sued the contractor and got a $10,000 judgment against that deposit, leaving only $20,000.

Because the security fell below $25,000, the contractor must put in another $5,000 so the total security is back up to $25,000.

How to Calculate

Replenishment Amount = max(0, $25,000 – Remaining Security)

Find out how much security is left after the recovery (Remaining Security).
Subtract the remaining amount from $25,000.
If the result is positive, that is the amount you must add. If the result is zero or negative, no addition is needed.

Security started at $30,000. A court judgment took $10,000.

Result: Replenishment Amount = max(0, $25,000 – $20,000) = $5,000. The contractor must add $5,000.

This law says that if the money or guarantee (called “security”) you had to keep drops below $25,000 because something was taken from it, you must add more money so it’s at least $25,000 again.

Key Takeaways

•Security must never drop below $25,000.
•If any part of the security is taken away, you have to top it up.
•You only add enough to bring the total back up to $25,000, not more.

Example

A contractor had to keep a $30,000 security deposit for a building project. The city later sued the contractor and got a $10,000 judgment against that deposit, leaving only $20,000.

Because the security fell below $25,000, the contractor must put in another $5,000 so the total security is back up to $25,000.

How to Calculate

Replenishment Amount = max(0, $25,000 – Remaining Security)

Find out how much security is left after the recovery (Remaining Security).
Subtract the remaining amount from $25,000.
If the result is positive, that is the amount you must add. If the result is zero or negative, no addition is needed.

Security started at $30,000. A court judgment took $10,000.

Result: Replenishment Amount = max(0, $25,000 – $20,000) = $5,000. The contractor must add $5,000.

Key Takeaways

Example

How to Calculate

Key Terms

References

§ 11936 Security Replenishment Requirement

Key Takeaways

Example

How to Calculate

Key Terms

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References