SB 440 appears to significantly reshape payment dynamics on California’s private construction projects, and its success in promoting timely payment and reducing disputes will depend on how effectively each party implements and adheres to these new processes.
While most states have enacted various forms of prompt payment laws for construction projects, California Senate Bill 440, known as the Private Works Change Order Fair Payment Act, marks a pivotal change in how payment obligations related to change orders are handled on private construction projects. Signed into law on October 10, 2025 by Governor Newsom, its implementation will affect owners, developers, contractors, and subcontractors alike. Importantly, it sets clear standards for processing change-order claims, imposing decisive deadlines and remedies.
The Big Picture
SB 440, effective for private contracts beginning on January 1, 2026, establishes a formal claim resolution process for work stemming from change orders on private projects. Key provisions include:
- A contractor or subcontractor may submit a claim (for a time extension or additional compensation) and the owner must provide a written statement within 30 days identifying disputed and undisputed portions.
Mr. DeVries may be contacted at mdevries@buchalter.com