New California Statutes Reshape Retainage and Payment Practices in Private Construction Contracts

Effective January 1, 2026, two groundbreaking California statutes will significantly impact private construction contracts executed after this date. The first, California Civil Code § 8811, imposes a strict five percent (5%) cap on retainage for most private projects, fundamentally changing the longstanding practice of parties negotiating retainage terms and percentages. The second, California Civil Code § 8850, introduces an elaborate prompt payment and claim resolution framework for private... By: Kilpatrick