Are Change Order Disputes Keeping You Up at Night?

By Brooke M. Pollard, Esq., LLM

If change orders are creating payment delays or disputes on your projects, a new California law may change how those issues are handled.

Beginning January 1, 2026, SB 440 — the Private Works Change Order Fair Payment Act — establishes a legal process for resolving payment claims related to changed work on private construction projects.

The law applies to contracts entered into on or after January 1, 2026, and is currently set to remain in effect through January 1, 2030.

Key highlights of the new law include:

• Contractors and subcontractors can submit written claims for changed work

• Owners must respond within 30 days

• Undisputed amounts must be paid within 60 days

• Unpaid amounts may accrue interest at 2% per month

• Disputes may proceed through a meet-and-confer and mediation process

• Contractors may gain stop-work rights if payment obligations are not met

• Contracts cannot waive these statutory rights

Subcontractors may also request that their claims be presented to the project owner when necessary.

Contractors and subcontractors should review their contract templates and change order procedures to ensure they align with the new requirements.

If you would like to discuss how SB 440 may affect your contracts or projects, please contact me at bpollard@tldlaw.com or (949) 756-0684.