California SB 440 / Civil Code § 8850

Effective date and sunset

• Effective for contracts entered into on or after January 1, 2026.
• Article 4 is repealed on January 1, 2030 unless extended.

What triggers the process

A statutory “claim” is triggered by a separate written demand sent by registered or certified mail with return receipt requested. In practice, that means email-only or portal-only submissions may not trigger the statute unless the mailing requirement is met.

Core timeline (high level)

• Owner must provide a written statement identifying disputed vs. undisputed portions within 30 days of receipt.
• Any undisputed portion must be paid within 60 days after the owner issues its written statement.
• If the owner misses required steps/timelines, the claim can be deemed denied (and additional escalation steps may become available).

Escalation steps (overview)

• Optional informal conference (“meet-and-confer”) may be demanded if the response is disputed or the owner does not respond on time.
• If a dispute remains after the informal conference, the statute provides for nonbinding mediation.
• The statute also includes a stop-work notice sequence in certain nonpayment / noncompliance scenarios.

Interest

The statute provides for 2% per month interest on undisputed amounts not timely paid, and on disputed amounts later found owed (with a specific start-date rule).

Primary sources

• Civil Code § 8850 (Leginfo)
• Related definitions (Leginfo)
• Civil Code time computation (Leginfo)