California · Project bonds
California Maintenance Bond
California has no single statewide maintenance bond statute. Cities, counties, and special districts require them in contracts and improvement agreements.
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— Josh A., Los Angeles, CA
California overview
Maintenance Bond in California
California licenses contractors through the Contractors State License Board (CSLB). Anyone who takes on work valued at $500 or more in combined labor and materials must hold a license, and most license applicants must file a contractor license bond.
California public works payment bond law (Cal. Civ. Code §§ 9550-9566). California requires a payment bond on public works contracts above a set dollar amount, and public agencies set their own bid security and performance bond requirements in the bid documents.
A maintenance bond is a surety bond that guarantees a contractor will repair defects in materials or workmanship for a set period after a project is completed. If the contractor does not make the repairs, the surety pays for them, up to the bond amount.
What a maintenance bond guarantees
The bond guarantees that if defects appear in the finished work during the warranty period, you will repair them. Covered defects are usually problems with materials, installation, or workmanship, not normal wear.
If you do not respond, the owner can claim against the bond. The surety can arrange the repairs or pay the owner the reasonable cost, up to the bond amount, and then collects from you.
Term and bond amount
The warranty period is set in the contract, most often one or two years starting at final acceptance. The amount is often 10% of the contract price. Some owners require a higher percentage on projects where repair costs could be large.
Maintenance bond vs. performance bond
A performance bond covers finishing the project. A maintenance bond covers the period after it is finished. Many performance bonds include a one-year maintenance period at no extra charge. A separate maintenance bond is used when the owner needs a longer period or a separate instrument.
| Performance bond | Maintenance bond | |
|---|---|---|
| Covers | Completing the project | Fixing defects after completion |
| Typical amount | 100% of contract | 10% of contract |
| Typical period | Through completion | 1 to 2 years after completion |
How it works
How to get a maintenance bond in California
Share the requirement
Send the contract, the warranty period, and the bond form the owner requires.
Check your performance bond
If you are bonding the job, ask whether the first warranty year is already included.
Underwriting review
An underwriter reviews the project and the contractor. Bonds up to $1,000,000 get an answer within 1 business day.
Sign, pay, and receive the bond
Sign the indemnity agreement and pay the premium. The executed bond is delivered for the owner.
Cost
What a California maintenance bond costs
Maintenance bonds are usually included with the performance bond, so there is typically no separate charge. The performance bond is generally 3% of the bond amount. Final approval and pricing are subject to underwriting.
What underwriters review
- Bond amount and warranty period
- Project type and repair risk
- Contractor credit and quality history
- Whether the surety also issued the performance bond
Estimate your premium
Typical cost: Usually included with the performance bond.
Who to contact
California licensing authority
Sources: Contractors State License Board; California Legislative Information. Requirements change. Confirm with the agency before you buy.
Other contractor bonds in California
Contractor License Bond
Required by your state or city before you can get or renew a contractor license.
Bid Bond
Guarantees your bid. If you win and walk away, the owner is paid the difference.
Performance Bond
Guarantees you will finish the project under the contract terms.
Payment Bond
Guarantees you will pay your subcontractors, laborers, and suppliers.
California maintenance bond questions
Is a maintenance bond required in California?
California has no single statewide maintenance bond statute. Cities, counties, and special districts require them in contracts and improvement agreements.
How much does a California maintenance bond cost?
Maintenance bonds are usually included with the performance bond, so there is typically no separate charge. The performance bond is generally 3% of the bond amount. Final approval and pricing are subject to underwriting.
What is a maintenance bond?
A maintenance bond guarantees a contractor will repair defects in materials or workmanship for a set period after a project is completed. The surety pays for repairs if the contractor does not make them.
How long does a maintenance bond last?
Most last one to two years from final acceptance of the work. The contract sets the period.
How much does a maintenance bond cost?
Usually nothing extra. Maintenance bonds are normally included with the performance bond, which is generally 3% of the bond amount. Final approval and pricing are subject to underwriting.
How much is a maintenance bond amount?
Often 10% of the contract price. Some owners require a higher percentage.
What defects does a maintenance bond cover?
Defects in materials, installation, and workmanship that appear during the warranty period. Normal wear and owner misuse are not covered.
Is a maintenance bond the same as a warranty bond?
Yes. The terms are used interchangeably, along with defect bond.
Do I still need a maintenance bond if I have a performance bond?
Only if the contract requires it or the owner needs a longer period than your performance bond includes. Ask your surety whether the first year is already covered.
Maintenance Bond in other states
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