Private Works Change Order Fair Payment Act.

Senator Ochoa Bogh's Private Works Change Order Fair Payment Act establishes a structured claims resolution process for construction contractors and subcontractors seeking payment or time extensions on private works projects in California. The legislation creates a mandatory three-step procedure requiring owners to review claims within 30 days, participate in informal settlement conferences, and engage in nonbinding mediation before pursuing litigation.

Under the new framework, which applies to contracts entered after January 1, 2026, owners must provide written responses identifying disputed and undisputed portions of claims within 30 days of receipt. Undisputed amounts must be paid within 60 days. For disputed portions, claimants may request an informal conference, after which owners have 10 business days to issue an updated written response. Any remaining disputes proceed to mediation with costs shared equally between parties. The law permits contractors to suspend work without penalty if owners fail to make required payments after proper notice.

The legislation includes specific provisions for subcontractors who lack direct standing to make claims against owners. In these cases, contractors must present claims on behalf of subcontractors within 30 days of receiving documentation. Undisputed amounts not paid within prescribed timeframes accrue interest at 2 percent monthly. The law excludes residential projects under four stories and expires on January 1, 2030.