Template: payment demand letter (to a general contractor, and to an owner)
In one paragraph
Two one-page demand letters that say exactly what is owed, why, by when, and what the statute provides if it is not paid, with nothing added. Letter A is from a subcontractor to a general contractor for a late progress payment or retention and cites B&P 7108.5 and Civil Code 8814 and 8818. Letter B is from a contractor to a homeowner for a completed progress payment under a home improvement contract and cites the contract's own schedule and Civil Code 8800. Each is served the way the statute recognizes and dated against the lien and stop payment notice deadlines so the letter is a step, not a substitute. Beside each is the letter from a Phase 3 case, filled in.
The rule
A prime contractor owes a subcontractor each progress payment within seven days of receiving it unless otherwise agreed in writing, may withhold only up to 150% of a good-faith dispute, and owes a 2% per month penalty plus the prevailing party's attorney fees for a violation, which is also cause for discipline (B&P 7108.5); retention must be passed down within 10 days with the same penalty (Civil Code 8814, 8818). An owner owes a direct contractor an undisputed progress payment within 30 days after a notice demanding payment (Civil Code 8800). A demand letter preserves nothing by itself: the lien must be recorded within the 8412 or 8414 window and a stop payment notice given inside that window (8508), and the action to enforce a lien filed within 90 days of recording (8460).
Why it matters
Most late payments get paid after one clear letter that names the amount, the statute and the date, because the person holding the money learns that the penalty is 2% a month and the other side's attorney fees. The letter works when it is short, accurate and calm, and when it goes out early enough that the lien and stop notice deadlines behind it are still open. Threats the statute does not back are the fastest way to lose the leverage the statute gives you.