AB 2021 - Works of Improvement: Disputed Amounts

• Amends retention withholding provisions in contracts for private and public works of improvement by expanding the types and amounts that may be withheld during disputes.

• Allows prime contractors and subcontractors to withhold disputed progress payments for delay damages, repair/replacement costs (up to 150%), Labor Code violations, mechanics liens already paid, and bonded retention amounts.

• Requires owners and direct contractors to pay undisputed progress payments within 30 days and establishes a 2 percent monthly penalty on wrongfully withheld amounts plus attorney's fees for the prevailing party.

• Modifies retention payment rules to allow withholding from final payments for liquidated damages, uncompleted work costs (150%), repair costs (150%), and other enumerated disputes between owners/contractors and contractors/subcontractors.

• Establishes that direct contractors must pay subcontractor retention shares within 10 days of receiving retention, unless a good faith dispute exists allowing withholding for specified reasons.