Need a HVAC Contract in California? AroundWire Can Help

In California, HVAC service contracts are shaped by stringent state and local regulations. Contractors must hold a valid C-20 (Warm-Air Heating, Ventilating and Air-Conditioning) license issued by the Contractors State License Board (CSLB), and may need additional local business licenses or permits. Contracts typically require compliance with California Building Codes, Title 24 energy efficiency standards, and, for public projects, prevailing wage laws under the California Labor Code. Insurance requirements are robust: general liability and workers’ compensation coverage are standard, and higher coverage limits are often stipulated for public sector clients. Indemnification clauses frequently favor the project owner, and contractors may be asked to provide performance and payment bonds on larger projects. California law mandates prompt payment—usually within 30 days of undisputed invoice receipt—and restricts the use of “pay-when-paid” clauses. Retainage is commonly capped at 5%, per Civil Code Section 8818. Dispute resolution often starts with negotiation or mediation before litigation or arbitration, in line with state contracting norms. Risk factors include strict liability for code compliance, environmental regulations (such as refrigerant handling), and significant penalties for unlicensed or non-compliant work. Contracts must also address California’s unique requirements for change orders, stop payment notices, and contractor notification obligations.