You’ve hired a contractor to remodel your kitchen or repair your roof, but now the work is late—or worse, not done correctly. You’re frustrated, and it might feel tempting to stop making payments until the project is finished to your satisfaction. But can you legally do that?
Before deciding to withhold payment, explore your rights, risks, and options under California law with a seasoned real estate litigation attorney.
Why Homeowners Consider Withholding Payment
Construction projects rarely go perfectly. Common issues that cause homeowners to consider stopping payments include:
- Incomplete or substandard work
- Delays that exceed the timeline in the contract
- Materials that differ from what was agreed upon
- Lack of communication or disappearing contractors
- Subcontractors demanding payment directly from you
While these concerns are legitimate, California has strict rules regarding withholding payment. If you stop paying without a clear legal reason, you could face legal consequences, especially if your contract doesn’t support your position.
When It May Be Legal to Withhold Payment
In some cases, homeowners do have the right to withhold payment. These typically include:
- Material breach of contract: The contractor has failed to meet key obligations outlined in the agreement.
- Failure to correct known issues: If you’ve notified the contractor of problems and they haven’t responded or resolved them.
- Violation of building codes or unsafe work: When the work poses safety risks or violates California law.
To make your position stronger, be sure to:
- Review the payment schedule in your contract
- Keep detailed records, including photos, emails, and text messages
- Provide written notice before withholding payment
The more documentation you have, the more likely your decision to withhold payment will stand up if the dispute ends up in court.
Risks of Withholding Payment Without Legal Grounds
If you withhold payment improperly, the contractor may respond with a mechanic’s lien on your home. This legal tool allows them to claim that they’re owed money and prevents you from refinancing or selling the property until the issue is resolved.
You may also be sued for breach of contract. Even if the contractor’s work was subpar, failing to follow the proper procedures could work against you in court.
Contractors who believe they’ve been wronged may stop work altogether or escalate the dispute. That’s why it’s important to tread carefully and know your rights before making any significant decisions.
Steps to Take Before Stopping Payment
You don’t have to accept poor work, but you also shouldn’t act on impulse. Here are some better ways to respond:
- Request a correction plan in writing. Give the contractor a clear deadline to fix the issue.
- Send a formal demand letter. A letter from an attorney can often get a contractor’s attention.
- Consider mediation. Some disputes can be resolved without litigation, especially if both sides want to avoid court.
- Consult an attorney early. The sooner you understand your legal footing, the better protected your investment will be.
Remember, a solid written contract and open communication are your best allies in avoiding problems in the first place.
Helping People in San Jose with Contractor Issues
If you’re dealing with a contractor dispute in San Jose, San Francisco, or elsewhere in California, don’t wait until things get worse. Withholding payment can be a risky move without the proper legal steps.
At BoyesLegal, we help homeowners protect their homes, finances, and peace of mind. Whether you need guidance reviewing a construction contract or are already facing a dispute, we’re here to help you make smart, informed decisions. Contact our office today to schedule a consultation.