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within 45 days after work

7/1/2013

1 Comment

 
Q 
How long can an owner withhold any retained funds after completion of a
job?



A
An owner must pay any retained funds,  withheld under a construction contract,
to the contractor within 45 days after  work has been completed on the property
(Cal. Civ. Code §8838). Completion is  defined as being any of the following: 
the date a certificate of occupancy was  issued, the date of completion on a
recorded notice of completion, the date the  owner accepted the work or moved
onto the property or the date of a cessation of  labor on the property for a
continuous period of 30 days or more if the owner  has recorded a notice of
cessation. (Cal. Civ. Code §§ 8180, 9200).


If the money was withheld because of a contractual
  disagreement over the work, the owner may withhold from the final payment  up
to  150% of the estimated value of the disputed amount (Cal. Civ. Code § 8814).



The original contractor sometimes will redo
  unsatisfactory work in accordance with the contract. If so, the original
  contractor must give notice to the owner when the redone work has been
  completed. Within 10 days of receiving this notice, the owner must either
  approve or disprove of the work and within 10 days of accepting the disputed
  work, the owner must release the funds. (Cal. Civ. Code §8816). For example, an
  owner and a contractor have a contract to remodel the owner's kitchen. Part of
  the remodeling includes a black marble countertop. At the end of the project,
  the owner sees that the counter is brown marble and withholds the funds for the
  countertop. The contractor replaces the counter with the proper color and sends
  notice to the owner. The owner then has 10 days to inspect the work, and if he
  or she accepts the work, he or she has 10 days to pay the withheld funds to the
  owner.


In the event the retention payments are not made
  within the time periods required, the owner will be subject to a charge of 2%
  per month on the improperly withheld amount, in lieu of any interest otherwise
  due. Furthermore, in any action for the collection of the wrongfully withheld
  funds, the prevailing party is entitled to  attorney's fees and costs (Cal.
Civ.  Code § 8818).


This laws regarding withheld payments cannot be
  waived (Cal. Civ. Code §8818).

1 Comment
lee and tam ms owner link
7/2/2013 07:16:56 am

http://publichealth.lacounty.gov/eh/docs/housing/brochure/tenright.pdf

Reply



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