Bill > SB440

This bill establishes a comprehensive claim resolution process for private construction projects in California, effective for contracts entered into on or after January 1, 2026, and set to expire on January 1, 2030. The legislation aims to ensure fair and timely payment for contractors and subcontractors by creating a structured approach to handling payment disputes. Under the bill, a "claim" can be a formal demand for a time extension, payment for completed work, or resolution of a disputed amount, which must be sent via registered or certified mail. When a claim is received, the owner must review it within 30 days and provide a written statement identifying disputed and undisputed portions. If disputes remain after an initial review, the bill mandates an informal meet-and-confer conference, followed by non-binding mediation if necessary. The process includes protections for contractors, such as the ability to suspend work without penalty if payment is not processed and provisions for interest (2% per month) on undisputed or later-determined owed amounts. The bill specifically excludes certain public agencies and residential projects of four stories or fewer from its provisions, and it emphasizes promoting economic stability in the construction industry by providing clear procedures for resolving change order and payment disputes.

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https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260SB440