Construction Contractor Attorney in California

You know how to build. The part that trips up good contractors is the legal paperwork around the work: the license, the entity, the contract, the notices and the deadlines that decide whether you get paid.

We help licensed contractors, subcontractors and specialty trades across San Diego and California set up their businesses correctly, use contracts that protect their margins, and protect their right to be paid when a project goes sideways.

Talk to Us About Your Business
  • General contractors, subs and specialty trades
  • Clear fees agreed up front where possible
  • Serving contractors throughout California

How We Help Contractors

Licensing and Business Setup

We help you choose the right entity, line up bonds and insurance, and plan around your license qualifier.

Contracts That Protect You

We draft and review prime contracts, subcontracts and home improvement contracts so payment and risk terms are clear.

Getting Paid

We help you use preliminary notices, mechanics liens, stop payment notices and prompt payment rules to collect what you earned.

Subs, Crews and Workers

We help you stay on the right side of licensing and worker classification rules when you hire subs and crews.

Disputes and Collections

We handle demand letters, change order disputes and payment claims, and help you resolve problems before they grow.

Who This Is For

  • General contractors and builders working on residential or commercial projects in San Diego County
  • Specialty trades, such as electrical, plumbing, HVAC, concrete, roofing, framing, solar and landscaping
  • Subcontractors who are tired of waiting on payment or signing contracts written entirely for the other side
  • Newly licensed contractors setting up their first business. Read: 5 Things That Sink Contractors in Year One
  • Established contractors ready to grow, add a partner, change their entity, or plan a future sale
Commercial building under construction in San Diego with a tower crane

Why the Paperwork Decides Who Gets Paid

Construction is a business of thin margins and long payment chains. The owner pays the general contractor, the general contractor pays the subs, and the subs pay their suppliers and crews. When money stops moving anywhere in that chain, the contractor with the clearest contract, the right notices on file and a valid license is usually the one in the strongest position to recover it.

California gives contractors real tools to protect themselves, including mechanics lien rights, prompt payment rules and limits on unfair contract terms. Almost all of those tools come with strict deadlines and paperwork requirements. Miss a notice, let a license lapse, or sign a subcontract without reading the payment and indemnity terms, and you can lose rights you did not know you had.

For example, a framing subcontractor finishes its work on a San Diego apartment project but never sent a preliminary notice because the general contractor had always paid on time. The general contractor runs into cash trouble and stops paying. Without a timely notice, the sub may have lost much of its lien rights on that project, and its options narrow to chasing a company that is already struggling.

Consider a common situation: a growing remodeling company forms an LLC and keeps working under the owner’s old sole proprietor license. On paper, the entity that signed the contracts was not the licensee. If a customer refuses to pay, that gap can become a serious problem, because California law sharply limits what a contractor without a proper license can collect.

None of this means you need a lawyer on every job. It means a few hours of setup, good contract templates and a simple notice routine can protect the revenue you are already working hard to earn.

The Legal Building Blocks of a Contracting Business

These are the areas we look at first when we work with a contractor. For a closer look at getting paid, read our guide: Preliminary Notices and Mechanics’ Liens.

In California, work that requires a contractor’s license must be performed by a licensee, and the license must be held by the person or entity that actually signs the contract. Each license has a qualifier, called the Responsible Managing Officer or Employee, whose experience supports the license. If your qualifier leaves, the Contractors State License Board (CSLB) must be notified and the qualifier replaced within strict deadlines, or the license can be suspended. A license also cannot be sold or transferred with a business. We help you plan for these rules before a key person leaves or a business changes hands.

Many contractors start as sole proprietors and later move to a corporation or LLC. The choice affects your personal liability, your taxes and what CSLB requires. For example, an LLC that holds a contractor’s license must carry an additional $100,000 worker bond and liability insurance on top of the standard $25,000 license bond, while corporations follow different rules. Changing your entity usually means getting a new license for the new entity, so timing matters. We work with your CPA to pick a structure that fits how you actually operate. See our Business Formation page.

If you work on homes, California has detailed rules for home improvement contracts. They must be in writing and include specific notices, a payment schedule and the homeowner’s right to cancel. The down payment is limited to $1,000 or 10 percent of the contract price, whichever is less, and you generally cannot collect more than the value of the work completed. New requirements took effect in 2026, including letting homeowners cancel by email and disclosing the use of subcontractors. A contract that misses required terms can make it harder to collect, so we review your template against the current rules.

On commercial and larger residential projects, the contract you sign often decides who carries the risk. We look closely at payment terms, retention, change order procedures, delay and liquidated damages clauses, insurance requirements, warranty terms and how disputes will be resolved. In California, a clause that says a subcontractor gets paid only if the owner pays the general contractor is generally unenforceable, but a clause that controls when payment is due can be enforced as a timing term. Knowing the difference matters when you negotiate.

Indemnity clauses decide who pays when something goes wrong on a project, such as an injury, property damage or a defect claim. California law limits how far those clauses can go. For example, subcontracts generally cannot require a sub to cover a general contractor’s own active negligence or claims outside the sub’s scope of work. We review these terms alongside your insurance agent, because an indemnity promise that your insurance does not cover can leave the business exposed.

California’s mechanics lien law protects contractors, subs and suppliers on private projects, but only if the steps are taken on time. That usually starts with a preliminary notice within 20 days of first furnishing work or materials, followed by a lien recorded within tight deadlines and a lawsuit to enforce it within 90 days of recording. Stop payment notices and payment bond claims are other tools, especially on public works. We help you build a routine so these rights are in place before you need them.

California Rules Every Contractor Should Know

  • No license, no lawsuit. Under Business and Professions Code section 7031, a contractor who was not properly licensed at all times during the work generally cannot sue to collect for work that requires a license, and a customer may be able to recover what it already paid. An unlicensed contractor can also still be sued. Keeping your license, bond and entity details current protects your right to be paid.
  • Workers’ compensation. Any contractor with employees must carry workers’ compensation. Certain classifications, including concrete, HVAC, asbestos abatement, roofing and tree service, must carry it even with no employees. A broader requirement covering all licensed contractors is currently scheduled to begin in 2028.
  • Prompt payment. California law sets deadlines for paying contractors and subcontractors, including payment to subs within 7 days of receiving a progress payment unless otherwise agreed in writing, and penalties for late payment of undisputed amounts.
  • Retention limits. Retention on public works is generally capped at 5 percent. Starting with private contracts signed on or after January 1, 2026, a similar 5 percent cap applies to many private projects, with exceptions, including for many smaller residential projects.
  • Unlicensed subs can become your employees. If you hire someone without the required license, the law can treat that person and their workers as your employees for purposes like workers’ compensation and wage rules.

Mistakes We Help Contractors Avoid

Most of these problems cost little to prevent and a great deal to fix after the fact.

  • Using a contract that misses California’s required terms. Home improvement contracts in California must include specific terms and notices, and some must appear in a set type size or on the first page. Missing one can put your payment at risk. We review your contract forms so they meet the rules before you use them on a job.
  • Skipping the preliminary notice. Many subs and suppliers skip the 20-day preliminary notice because the customer has always paid. The notice is often what preserves lien rights if that changes. Sending it on every eligible job, as a routine, is far easier than trying to recover without it.
  • Signing the customer’s contract without reading the risk terms. Owner and general contractor forms are written to protect the side that drafted them. Broad indemnity, waived delay claims, short notice windows for change orders and one-sided termination rights are common. Some of these terms may be negotiable, and some may be limited by California law.
  • Doing extra work on a handshake. Change orders are where many contractors lose margin. When extra work is done on a verbal request, it can be hard to prove it was authorized or what it was supposed to cost. A simple written change order process, followed every time, protects your price and your schedule.
  • Signing unconditional lien releases before the money clears. California requires specific lien release forms. An unconditional release can be effective as soon as it is signed, even if the check later bounces. Using conditional releases until payment is actually received is a small habit that avoids a large loss.
  • Letting the license and the business drift apart. Contracts signed by an entity that does not hold the license, a lapsed bond, or a qualifier who quietly left can all create licensing gaps. Because unlicensed work can cost you the right to be paid, we help you keep the license, the entity and the paperwork lined up.
  • Treating crews as independent contractors by default. California’s worker classification rules are strict, and construction has its own rules on top of them. A sub generally needs a valid license, a written subcontract and its own independent business to be treated as independent. See our guide to AB 5 and the ABC Test.
Contractor reviewing blueprints on a job site table with a hard hat and tape measure

Getting Paid on a Private Project: The Key Deadlines

On most private projects in California, protecting your right to be paid follows a sequence like this. The exact deadlines depend on your role and what the owner records, so treat this as an overview, not a substitute for advice on your project.

  1. Before work starts: confirm the owner, the property, the lender if there is one, and who hired you. Keep a signed contract and your license information on file.
  2. Within 20 days of first furnishing work or materials: subs and suppliers serve a preliminary notice. A late notice still helps, but generally only covers work from 20 days before it is served.
  3. During the job: invoice on schedule, document change orders in writing, and use conditional lien releases in exchange for progress payments.
  4. When the work is done: watch for a Notice of Completion or Notice of Cessation. If one is recorded, the lien deadline gets much shorter, as little as 30 days for subs and 60 days for the direct contractor.
  5. If you are not paid: record the mechanics lien within the deadline that applies, generally no later than 90 days after the project is completed if no notice is recorded.
  6. Within 90 days after recording the lien: file a lawsuit to enforce it, or the lien generally becomes unenforceable. Many payment disputes settle once a lien is properly in place.

For a deeper walkthrough, read Preliminary Notices and Mechanics’ Liens: The Cash-Recovery Tool Most New Contractors Never Use.

Taking On Public Works

Public projects for cities, school districts, water agencies and the state can bring steady, larger work, but they follow a different rulebook than private jobs. Before you bid, it helps to understand what changes.

  • Registration. Contractors and subcontractors generally must register with the Department of Industrial Relations to bid on or perform public works, with exceptions for small projects.
  • Prevailing wage. Workers on most public works must be paid at least the prevailing wage rate for their craft and area, and certified payroll records are required.
  • Different payment tools. Mechanics liens generally are not available against public property. Instead, contractors rely on stop payment notices and claims against the project’s payment bond, each with their own notice rules and deadlines.
  • Bid and contract terms. Public contracts often include strict requirements on bonds, listing subcontractors, change orders, claims procedures and retention. Missing a claim deadline in the contract can waive a claim.

If public work is new for your business, we can review the bid documents and contract before you commit, so you know what you are agreeing to.

How It Works

1. Tell Us About Your Business

Share your license, your entity, the kind of work you do and where it is getting stuck.

2. We Review Your Setup

We look at your license details, entity, contracts, insurance and payment process.

3. We Fix the Gaps

We update your contract templates, entity and notice routine so they fit how you work.

4. Help on Live Projects

We review new contracts, change orders and payment problems as they come up.

5. Plan for Growth

We help you prepare for new partners, larger projects, public work or a future sale.

What to Have Ready Before We Talk

You do not need all of this for a first conversation, but the more you can share, the more useful that conversation can be.

  • Your CSLB license number, classifications and the name of your qualifier
  • Your entity documents, such as articles, an operating agreement or bylaws
  • The contract templates you use now, including any home improvement contract
  • A contract or subcontract you have been asked to sign
  • Your bond and insurance certificates, including workers’ compensation or an exemption
  • For a payment problem: the contract, change orders, invoices, lien releases, notices sent and key dates
  • A list of subs and crews you work with regularly and how they are paid
  • Your plans for the next year or two, such as public work, a new location, a partner or a sale

Working With Your Bonding Agent, Insurance Broker and CPA

Contractors rely on a team, and we work alongside yours. Your bonding agent and insurance broker know what your policies cover, so we review indemnity and insurance terms with them in mind before you sign. Your CPA helps decide how your entity is taxed and how you track job costs, retention and change orders. On a payment problem, we coordinate with your project manager or bookkeeper to pull the invoices, notices and records we need. The goal is simple: one consistent set of contracts, notices and records that supports your business on every job.

Two-story wood-framed house under construction in Southern California

Building a Contracting Business That Lasts

Many contracting businesses depend on one person: the owner who holds the license, knows the customers and signs every contract. That works until the business wants to grow, add a partner or eventually sell. Planning early can make each of those steps easier.

  • Partners and key employees. If you bring in a partner, or promise a foreman or project manager a share of the business, put the terms in writing. A clear operating agreement or shareholder agreement sets out who owns what, who makes decisions and what happens if someone leaves.
  • Your qualifier. If your license depends on someone other than you, plan for what happens if that person retires or leaves, because the deadlines to replace a qualifier are short.
  • Standard documents. A consistent set of contracts, change order forms, subcontract terms and lien release routines makes the business easier to run and more attractive to a buyer or lender.
  • Equipment, vehicles and property. How you hold equipment, vehicles and any yard or shop space affects liability, taxes and what a buyer will pay. Some owners hold real estate in a separate entity. See Real Estate Holding LLCs.
  • A future sale. Because a license cannot be transferred, selling a contracting business takes extra planning around the licensed entity, the qualifier, open projects, bonds and warranty obligations.

Fees

We explain how the work will be priced before we start. Contract templates, entity setup and reviews of defined documents can often be handled for a fixed fee. Payment disputes and larger matters may be hourly or a combination, because it can be hard to know in advance how long they will take. See our fees page for how we price legal work.

Common Questions

Answers to what contractors ask most.

Not for every job, but it helps to have your main templates reviewed and to get a second look at any large or unusual contract before you sign. A one-time review of your home improvement contract, your standard subcontract terms and your change order process can protect every job that follows. For big projects, reviewing the payment, indemnity and dispute terms before you sign is often worth the time.

It depends on your role and whether the owner records a Notice of Completion or Cessation. If no notice is recorded, the deadline is generally 90 days after the project is completed. If a notice is recorded, the deadline can drop to 60 days for a direct contractor and 30 days for subs and suppliers. After recording, you generally have 90 days to file a lawsuit to enforce the lien.

It can be very difficult. California law generally bars a contractor who was not properly licensed at all times during the work from suing to collect for work that required a license, and a customer may be able to recover what it already paid. An unlicensed contractor can also still be sued. There are narrow exceptions. If there was a gap in your license, bond or entity details, talk to a lawyer before you take action to collect.

Generally, no. A clause that makes a subcontractor’s payment depend on whether the owner pays the general contractor is generally unenforceable in California. A clause that sets when payment is due, often called pay-when-paid, can be enforced as a timing term, but it cannot delay payment indefinitely. Many subcontracts still include this language, so it is worth reviewing before you sign.

It depends on your ownership, taxes and growth plans. Both can limit personal liability, but California treats them differently for licensing. An LLC that holds a contractor’s license must carry an additional worker bond and liability insurance, while a corporation follows different rules. Moving to a new entity usually means a new license. We work with your CPA to pick the structure that fits.

Often not. California applies strict tests to decide who is an employee, and construction has its own rules. A subcontractor generally must hold a valid license for the work, have a written subcontract and run its own independent business to be treated as independent. Someone doing licensed work without a license may be treated as your employee. We can review how your crews are set up.

Act quickly and keep records. Check your lien and notice deadlines first, because they keep running while you negotiate. Gather the contract, change orders, invoices and communications. A clear demand letter often moves payment, and a properly recorded lien can add pressure on private projects. We help you choose the next step based on the amount at stake and the deadlines that apply.

Yes. Public works come with their own requirements, including registration with the Department of Industrial Relations, prevailing wage and certified payroll rules, and payment bond claims instead of mechanics liens. We can review bid documents and contracts, and help with payment claims. If a project is new territory for your business, it helps to plan before you bid.

A conditional release only takes effect once you have actually received the payment it describes. An unconditional release generally takes effect as soon as it is signed, whether or not the money arrives. California requires specific statutory forms for both, in progress and final versions. As a rule of thumb, exchange conditional releases for payments and sign unconditional releases only after the funds have cleared.

For most home improvement contracts, the homeowner has a right to cancel within 3 business days, and 5 business days for seniors. The down payment is limited to $1,000 or 10 percent of the contract price, whichever is less, and you generally cannot collect more than the value of the work performed or materials delivered. Starting in 2026, homeowners can also cancel by email, so your contract should include your email address.

You can sell the business, but a California contractor’s license cannot be sold or transferred. A buyer needs its own license, or the sale has to be structured so the licensed entity continues with a qualified license holder in place. Planning for the qualifier, contracts in progress, bonds and warranties early can make a sale smoother. See Buying or Selling a Business.

Related Guides and Services

Building Something? Protect Your Right to Get Paid.

Talk to Us About Your Business

Or call 619-895-1066. Law Office of Christopher Scott-Dixon APC, 3130 5th Ave Ste 1, San Diego, CA 92103.

This page provides general information, not legal advice. Reading it or contacting the firm does not create an attorney-client relationship.

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