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are california contractors required to apply all or a portion of the retainer to bill as paydown process unfolds?

CaliforniaConstruction ContractPayment Disputes

Total estimate $2,600 Retainer $1000 TOTAL outstanding based on estimate, $1600 First invoice $1530 (out of $2600 total estimate) PAID toward invoice $1000 THEREFORE, $530 of invoice unpaid (BUT a $1000 sitting in retainer that has not been applied to my account) The question is Does the contractor have to apply some or all of the retainer toward the invoices?

1 reply

Nov 7, 2018
In California, the requirements related to construction contracts vary immensely depending on whether the contract is or is not a "Home Improvement Contract." The full requirements for a home improvement contract are too numerous to really get into here, but can be found in Section 7150-68 of the CA Business and Professions Code.

To the extent that the contract is not a home improvement contract, the contract basically defines itself. There should be a section defining the "retainer" amount and its application to invoiced amounts as payment (and/or its return).

Home improvement contracts, on the other hand, specifically allow for a "Down Payment" not to exceed $1,000 (or 10% of the contract price) and which must be set out in a specific manner on the contract. This is specifically a down payment and not a retainer.

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