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SB-61 • 2026

Private works of improvement: retention payments.

Private works of improvement: retention payments.

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor
Cortese
Last action
2025-07-14
Official status
Chaptered by Secretary of State. Chapter 49, Statutes of 2025.
Effective date
Not listed

Plain English Breakdown

Checked against official source text during the last sync.

Private Construction Projects: Limiting Retention Payments

This law sets a limit on how much money can be held back from contractors and subcontractors in private construction projects.

What This Bill Does

  • Limits the amount of retention payments to no more than 5% of each payment made under a contract for private work.
  • Prohibits owners, direct contractors, and subcontractors from withholding more than 5% as a retention payment.
  • Requires courts to give winning parties in disputes over these limits reasonable legal fees.

Who It Names or Affects

  • Contractors working on private construction projects
  • Subcontractors involved in private construction work

Terms To Know

Retention payment
Money held back from a contractor or subcontractor until the completion of a project to ensure quality and performance.

Limits and Unknowns

  • The bill does not specify what happens if there are exceptions to the 5% limit.
  • It is unclear how this law will be enforced in practice.

Bill History

  1. 2025-07-14 California Legislative Information

    Chaptered by Secretary of State. Chapter 49, Statutes of 2025.

  2. 2025-07-14 California Legislative Information

    Approved by the Governor.

  3. 2025-07-03 California Legislative Information

    Enrolled and presented to the Governor at 11:15 a.m.

  4. 2025-06-23 California Legislative Information

    In Senate. Ordered to engrossing and enrolling.

  5. 2025-06-23 California Legislative Information

    Read third time. Passed. (Ayes 71. Noes 0. Page 2247.) Ordered to the Senate.

  6. 2025-06-18 California Legislative Information

    Read second time. Ordered to consent calendar.

  7. 2025-06-17 California Legislative Information

    From committee: Do pass. Ordered to consent calendar. (Ayes 11. Noes 0.) (June 17).

  8. 2025-05-12 California Legislative Information

    Referred to Com. on JUD.

  9. 2025-04-24 California Legislative Information

    In Assembly. Read first time. Held at Desk.

  10. 2025-04-24 California Legislative Information

    Read third time. Passed. (Ayes 37. Noes 0. Page 887.) Ordered to the Assembly.

  11. 2025-04-10 California Legislative Information

    Read second time. Ordered to consent calendar.

  12. 2025-04-09 California Legislative Information

    From committee: Do pass. Ordered to consent calendar. (Ayes 13. Noes 0. Page 705.) (April 8).

  13. 2025-03-26 California Legislative Information

    From committee with author's amendments. Read second time and amended. Re-referred to Com. on JUD.

  14. 2025-03-26 California Legislative Information

    Set for hearing April 8.

  15. 2025-01-29 California Legislative Information

    Referred to Com. on JUD.

  16. 2025-01-10 California Legislative Information

    From printer. May be acted upon on or after February 9.

  17. 2025-01-09 California Legislative Information

    Introduced. Read first time. To Com. on RLS. for assignment. To print.

Official Summary Text

SB 61, Cortese.
Private works of improvement: retention payments.
Existing law generally governs retention payments withheld with respect to a contract for a private work of improvement, including by requiring an owner that withholds a retention from a direct contractor to, within 45 days after completion of the work of improvement, pay the retention to the contractor.
With respect to a contract for a private work of improvement, this bill would limit the amount of a retention payment by, among other things, prohibiting a retention payment withheld from a payment by an owner from the direct contractor, by the direct contractor from any subcontractor, and by a subcontractor from any subcontractor thereunder, from exceeding 5% of the payment, subject to certain exceptions. The bill would require a court to award reasonable attorney’s fees to the prevailing party in any action to enforce these
provisions.

Current Bill Text

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