{"id":905043,"date":"2025-11-25T13:57:40","date_gmt":"2025-11-25T20:57:40","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=905043"},"modified":"2025-11-25T13:57:44","modified_gmt":"2025-11-25T20:57:44","slug":"sb440-change-order-californias-new-law","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/sb440-change-order-californias-new-law\/","title":{"rendered":"Is Your Private Project Ready For California’s New Change Order Law?"},"content":{"rendered":"\n

Benjamin J. Morris | Foley & Lardner<\/a><\/p>\n\n\n\n

The Clock is Ticking: SB 440 Takes Effect January 1, 2026<\/strong><\/p>\n\n\n\n

The new year brings a mandatory shakeup to California\u2019s private construction industry. Effective January 1, 2026, Senate Bill 440 \u2014 the Private Works Change Order Fair Payment Act (\u201cSB 440\u201d) \u2014 will govern how contractors and owners resolve disputes over change orders<\/a> and time extensions. Codified as new Civil Code \u00a78850, this law imposes strict, non-negotiable timelines backed by severe financial penalties. For all private contracts signed on or after this date, the old way of handling delayed change order reviews is over.<\/p>\n\n\n\n

What Claims Are Covered? Know the Scope<\/strong><\/p>\n\n\n\n

It is critical to understand that SB 440 does not<\/strong> apply to every dispute on your project. This law is narrowly focused on providing mandatory protections only for claims related to changes in the scope of work.<\/p>\n\n\n\n

A \u201cclaim\u201d that triggers the \u00a78850 process is a formal, documented demand for one or more of the following:<\/p>\n\n\n\n

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  1. A Time Extension: Including relief from owner-assessed delay damages.<\/li>\n\n\n\n
  2. Payment of Additional Compensation: For approved changes to the scope of work.<\/li>\n\n\n\n
  3. Payment of a Disputed Amount: A specific payment that the owner has challenged or withheld.<\/li>\n<\/ol>\n\n\n\n

    If your claim falls into one of these categories, the following mandatory deadlines apply.<\/p>\n\n\n\n

    The Two Non-Negotiable Deadlines<\/strong><\/p>\n\n\n\n

    The Mandate<\/strong><\/th>The Deadline<\/strong><\/th>The Consequence of Failure<\/strong><\/th><\/tr><\/thead>
    Owner\u2019s Claim Review & Response<\/td>30 days after receipt of the documented claim.<\/td>The claim is deemed denied, automatically escalating the dispute to mandatory non-binding mediation.<\/td><\/tr>
    Payment of Undisputed Amounts<\/td>60 days after the owner issues the written response identifying the undisputed portion.<\/td>Interest accrues on the unpaid amount at a penalty rate of 2% per month (24% annual), and the contractor gains the right to issue a stop-work notice.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

    The Critical Nuance: When Can a Deadline Be Extended?<\/strong><\/p>\n\n\n\n

    The law prohibits parties from waiving these protective timelines in the initial contract. However, the legislature included a crucial provision for practical flexibility:<\/p>\n\n\n\n