Menu
Home>Levelset Community>Legal Help>retention funds dispute

retention funds dispute

CaliforniaPayment Disputes

I am a landscape contractor, working on a small residential garden project in San Anselmo CA. Contract total is $18,500. I have installed 95% of the project, but cannot complete the 5% balance (aprox. 10 plants w/irrigation pending) because the homeowner is waiting on a permit to complete some home repairs that would impact the landscape. I have the balance of plants in my posession, have been caring for them pending green light for installation. Payments total $12,250, balance due is $6250. Over a month has passed since we pulled off the job, and there is no permit in sight. The homeowner is holding withholding $3000 of the $6250 bal owed as retention, indefinitely. My contract states: c. Delays: Contractor shall be excused for delays or defaults in performance of Contract caused by Owner, acts of governmental authority, acts of God, inclement weather, war, commercial shortages of required labor or materials, litigation, labor disputes, Additional Work, failure of Owner to make prompt payment, or other contingencies beyond Contractor’s control. Can he do this? What recourse do I have? Thank you! Lisa Hirsch C27962498 415 497 4622

1 reply

Sep 1, 2020
In California, there is not a restriction on the retainage that can be withheld from a contractor on commercial or residential jobs. It is customary to withhold between 0%-10% as retainage. However, California does set a deadline for withheld funds to be returned. California property owners must release retainage to the general contractor within 45 days of completion of the work. The California Retainage Laws Guide for Private and Public Projects is likely to be helpful to you. Typically, if retainage is held late, I can be recovered by filing a California mechanics lien. A claim for retainage in general can also be made according to California's Prompt Payment Act. This process typically is a court process. Notice is required to recover retainage in California and must be in writing. You can read our guide to writing an effective demand letter here. Hope that helps!
0 people found this helpful
Helpful