Many owners and contractors assume that their construction contract controls how claims and disputes will be handled. After all, substantial time is often spent negotiating notice provisions, mediation requirements, dispute resolution procedures, and payment terms.
Beginning with many private construction contracts entered into on or after January 1, 2026, that assumption may no longer be
California’s construction industry will undergo a significant change starting in 2026. On July 14, 2025, Governor Gavin Newsom signed Senate Bill 61 into law, creating a 5% cap on retention for private works of improvement. The new law aligns private projects with the retention limits established for public works since 2012. The new statute, Civil
California has passed Senate Bill No. 1103, which extends specific protections traditionally reserved for residential tenants to “qualified commercial tenants.” Starting January 1, 2025, small businesses, nonprofits, and microenterprises that meet specific criteria will gain additional rights under the law, including limits on operating cost allocations and required notice periods for rent increases and