Takes Effect

Takes effect

California Work and business

Public agencies can withhold no more than 5% from architect and engineer payments

On design-bid-build contracts signed directly with architecture or engineering firms, public agencies may hold back no more than 5% of each payment as retention, unless a complex project justifies more. Retention must be released within 60 days after the firm finishes its services.

Who it affects

Architecture and engineering firms, and public agencies that hire them

When

This law takes effect on January 1, 2027. California laws take effect on January 1 of the year after they are signed, unless the law says otherwise.

Official text

California SB 1205: Public contracts: retention: architecture or engineering services.
On California Legislative Information. The official text is what counts; read it before you act.

Not legal advice. Plain-English summaries to help you find what changes and when. Not legal advice: read the official text, and ask a lawyer about your situation.

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