Most construction disputes are about one of four things: money, scope, quality, or time. What decides them is rarely who was right on the merits — it is whether the contract set out a procedure, whether anyone followed it, and whether the claim was brought before a statutory deadline ran out. California construction deadlines are short and unforgiving, and several of them run from events rather than from when you decide to act. Bay Legal, P.C. represents owners, contractors, subcontractors, and suppliers in construction disputes across the state.
Definition: A construction dispute is a conflict between parties to a building project over payment, scope, workmanship, or delay, resolved by contract procedure, statute, or the courts.
I cannot imagine how we would have navigated through our conflict with our contractor, had it not been for Jayson. He was professional, compassionate, informative and responsive.
This review reflects one client’s experience. Results depend on the facts and law of each individual case and do not guarantee or predict a similar outcome in your matter.
What causes most California construction disputes?
- Payment. Unpaid progress payments, withheld retention, and backcharges. The largest category by volume, and the one with the most statutory remedies attached.
- Scope and change orders. Whether work was inside the contract price or an extra. Disputes here almost always trace back to work performed without a written, signed change order.
- Defects. Workmanship, materials, design, or site preparation that failed. On residential work the Right to Repair Act supplies both the standard and a mandatory pre-litigation process.
- Delay. Who bears the cost when weather, site conditions, or another trade puts the schedule back. Whether it is recoverable usually turns on a no-damage-for-delay clause and on whether notice was given as the contract required.
- Licensing. Raised as a defence more often than as a claim. Under Business and Professions Code section 7031, a contractor unlicensed at any point during performance cannot recover compensation at all.
Which deadlines can end your claim?
This is the part the rest of the internet leaves out, and it is the reason to call early rather than after negotiations stall. Several of these run from project events, not from the date you decided the dispute was serious.
| Claim | Deadline | Runs from | Authority |
|---|---|---|---|
| Record a mechanics lien (direct contractor) | Earlier of 90 days, or 60 days after a notice of completion | Completion of the work of improvement | Civ. Code § 8412 |
| Record a mechanics lien (all other claimants) | Earlier of 90 days, or 30 days after a notice of completion | Completion of the work of improvement | Civ. Code § 8414 |
| Sue to enforce a recorded lien | 90 days | Recording of the lien | Civ. Code § 8460 |
| Sue on a private payment bond | 6 months | Completion of the work of improvement | Civ. Code § 8610 |
| Patent defect claim | 4 years | Substantial completion | Code Civ. Proc. § 337.1 |
| Latent defect claim | 3 years, capped at 10 years overall | Discovery; repose from substantial completion | Code Civ. Proc. §§ 338(b), 337.15 |
Full text: § 8412 · § 8414 · § 8460 · § 8610 · § 337.1 · § 337.15 · § 338.
How are construction disputes resolved in California?
Four paths, and the contract usually decides which is available before the dispute exists.
| Path | Who decides | Binding | When it fits |
|---|---|---|---|
| Negotiation | The parties | Only if settled | Almost always worth trying first; a documented demand resolves a large share |
| Mediation | Nobody — a neutral facilitates | No | Frequently required by the contract before any filing |
| Arbitration | An arbitrator | Yes, with very limited appeal | Where the contract mandates it; faster and private, but arbitrator fees are real |
| Litigation | A judge or jury | Yes, with full appeal rights | Where no arbitration clause applies, or where injunctive relief or multiple parties are involved |
Court makes sense when the other side will not engage, when a statutory deadline is about to expire and filing preserves the right, when several parties share responsibility and need to be joined in one proceeding, or when only a court can grant the relief you need. Venue follows the project: Bay Area work goes to San Francisco, Santa Clara, San Mateo, Alameda, or Contra Costa County Superior Court; Southern California projects to Los Angeles, Orange, or Ventura.
Does insurance cover a construction dispute?
Sometimes, and it is worth checking before assuming the answer. Four policies commonly sit behind a construction project:
- Commercial general liability — property damage and bodily injury. Typically excludes the cost of repairing the insured’s own defective work, which is where most defect claims founder.
- Professional liability — design and planning errors, carried by architects and engineers.
- Builder’s risk — physical damage to the project during construction.
- Performance and payment bonds — completion and payment guaranteed by a surety, which is a claim against the bond rather than an insurance claim.
Tender the claim to the carrier early and in writing. A liability policy generally carries a duty to defend that is broader than the duty to indemnify, which can mean the insurer funds the defence even where coverage for the eventual judgment is doubtful. Late tender is itself a coverage argument.
How do you protect your position before a dispute starts?
Construction disputes are won and lost on documentation, and the documents that matter are created during the project rather than after it.
- Put every change in writing. Signed change orders before the changed work begins. Verbal approval on site is the single most common cause of an unpaid extra.
- Give contractual notice on time. Most contracts require written notice of a delay or claim within a set period. Missing it can waive the claim regardless of merit.
- Photograph conditions and progress. Dated site photographs are the cheapest evidence in construction and the most persuasive.
- Keep the payment record clean. Applications, approvals, payments, and outstanding balances, reconciled as you go.
- Serve preliminary notice. Anyone who is not a direct contractor should serve preliminary notice under Civil Code section 8200 early. It preserves lien, stop payment notice, and bond claim rights, and its absence ends more good claims than any other omission.
- Verify licences. Through the Contractors State License Board, before contracting and periodically during a long project.
Who handles construction disputes at Bay Legal?
Disputes run through the firm’s litigation group. Stephen Moses and Jason Rose both practise construction and real estate litigation. Kelsey J. Ibarrola handles construction matters including arbitration. Managing attorney Jayson R. Elliott and lead litigation attorney Evan Livingstone lead the group.
Bay Legal, P.C. serves clients statewide from offices in Palo Alto and Los Angeles, including projects across San Francisco and the wider Bay Area.
Frequently Asked Questions
How long do I have to bring a construction claim in California?
It depends on the claim. A mechanics lien must be recorded within 90 days of completion, or sooner if a notice of completion is recorded, and enforced by suit within 90 days of recording. A private payment bond claim must be filed within six months of completion. Patent defect claims run four years from substantial completion; latent defects three years from discovery, capped at ten.
Should my construction dispute go to arbitration or court?
Usually the contract has already decided. Where an arbitration clause applies it is generally enforceable. Arbitration is faster and private but offers very limited appeal and real arbitrator fees. Litigation is slower and public but preserves full appellate rights and is better suited to disputes involving several parties who need to be joined.
Does my insurance cover a construction dispute?
Possibly. Commercial general liability covers property damage and injury but typically excludes repairing the insured’s own defective work. Professional liability covers design errors. Builder’s risk covers damage during construction. Tender the claim in writing early — the duty to defend is often broader than the duty to indemnify, and late tender is itself a coverage argument.
What if the other side refuses to negotiate?
Filing may be the only way to preserve a right that is about to expire, and it frequently restarts a stalled negotiation. Before filing, check whether the contract requires mediation first — many California construction contracts do, and filing without satisfying that step can bring a stay or a fee consequence.
Can I still claim for extra work with no written change order?
Sometimes. Enforcing the contract itself is difficult without one, particularly on home improvement contracts where a written signed change order is statutorily required. California courts do recognise quantum meruit and unjust enrichment, which can allow recovery of the reasonable value of work the owner directed or knowingly accepted. That is a fallback, not a right.
Related Questions
What is a no-damage-for-delay clause?
A provision barring recovery of delay costs, allowing only a time extension. Common in California construction contracts and often enforceable, though exceptions have been recognised for delays caused by active interference or bad faith.
Who pays the attorney fees in a construction dispute?
Each side, unless a contract or statute shifts them. Many construction contracts contain fee clauses, and the retention penalty provisions in Civil Code section 8818 shift fees to the prevailing party.
Can I stop work if I am not being paid?
Possibly, but not automatically. California provides statutory stop-work rights in defined circumstances, and the contract may impose its own conditions. Stopping without a proper basis is itself a breach, so take advice before downing tools.
What is a stop payment notice?
A statutory notice freezing construction funds held by the owner or lender, so an unpaid claimant reaches the money rather than the property. It is often used alongside a mechanics lien rather than instead of one.
Talk to a California construction dispute attorney
Lien and notice deadlines keep running while negotiations continue, and several of them are 90 days or shorter. If a payment is overdue, a defect has surfaced, or a claim has been made against you, an early call preserves options a later one cannot. To discuss a construction dispute with a Bay Legal attorney, call the office nearest you or email intake.
Bay Legal, P.C. — serving California statewide
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667 Lytton Ave Ste 3, Palo Alto, CA 94301
Southern California office
3211 Cahuenga Blvd W Ste 212, Los Angeles, CA 90068
Intake: intake@baylegal.com
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Website: https://baylegal.com