California SB61 limits retention payments for private works of improvement to 5% of the payment.

California SB61 adds Section 8811 to the Civil Code, setting a cap on retention payments for private works of improvement at 5% of the payment. This applies to contracts entered into after January 1, 2026. The total retention proceeds cannot exceed 5% of the contract price. The bill also mandates that a court award reasonable attorney's fees to the prevailing party in any action to enforce these provisions. Exceptions apply to residential projects not exceeding four stories and mixed-use projects.

California SB61 limits retention payments for private works of improvement to 5% of the payment.

California SB61 adds Section 8811 to the Civil Code, setting a cap on retention payments for private works of improvement at 5% of the payment. This applies to contracts entered into after January 1, 2026. The total retention proceeds cannot exceed 5% of the contract price. The bill also mandates that a court award reasonable attorney's fees to the prevailing party in any action to enforce these provisions. Exceptions apply to residential projects not exceeding four stories and mixed-use projects.