I am a licensed contractor in CA. We are about to sign a T&M contract for a defined work scope at a private residence. My boss says the homeowner cannot withhold retention. I disagree. What is the law?
Nov 30, 2017
On California private projects, unless there has been a dispute or unless it has otherwise been agreed to by contract, an owner must pay progress payments to the direct contractor within 30 days after notice demanding payment pursuant to the contract. If there is a good faith dispute, however, the owner may withhold up to 150% of the disputed amount. As for final payment - the owner may withhold 150% of the disputed amount from final payment if there is a good faith dispute.