How do I collect unpaid invoices in California?
How to collect unpaid invoices in California: consent laws, lien rights, and court options
Published May 14, 2026
Short answer
California is a two-party (all-party) consent state under Penal Code §632: all parties must consent before a call is recorded, and violations carry criminal and civil liability. Mechanic's lien rights require a preliminary notice filed within 20 days of first furnishing; missing this deadline forfeits lien rights for all work performed before the notice. The contract statute of limitations is 4 years. California small claims is capped at $12,500 for individuals and $6,250 for businesses, making it the right venue for most residential invoice disputes.
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Connect your booksCalifornia is one of the strictest call-recording states in the country. Penal Code §632 requires that all parties to a confidential communication consent before the communication is recorded. 'Confidential' has been interpreted broadly by California courts to cover most business phone conversations. Violations carry criminal penalties (up to $2,500 per violation plus imprisonment) and civil damages ($5,000 per violation under CIPA §637.2). Any automated or AI-assisted call placed to a California customer must either obtain explicit consent before recording or not record at all.
California mechanic's lien law turns on the preliminary notice. Contractors and subcontractors who furnish labor or materials to a California project must serve a preliminary 20-day notice (Cal. Civ. Code §8204) on the property owner, general contractor, and construction lender within 20 days of first furnishing. Work performed more than 20 days before the notice was served is excluded from the lien. For a project where you worked for 6 weeks before sending the notice, the first 3 weeks of work fall outside your lien rights. File the notice on day 1 of mobilization.
Once the preliminary notice is filed, the lien itself must be recorded within 90 days after completion of the direct contract, or within 60 days after recording of a valid notice of completion or cessation -- whichever is earlier (Cal. Civ. Code §8412). For owner-occupied single-family residential projects under direct contract, the window shortens to 60 days after completion. Mark the deadline on the day the job closes. Suit to enforce the lien must be brought within 90 days of recording.
California small claims court (Cal. Code Civ. Proc. §116.220) handles individual claims up to $12,500. Businesses are limited to $6,250 per claim and may file no more than two claims exceeding $2,500 per calendar year. Corporations and LLCs may not appear through counsel in small claims -- a company representative must appear. Filing fees are $30 to $100. Cases are typically heard within 30 to 70 days. For residential service invoices between $1,000 and $12,500, small claims is often faster and cheaper than attorney-assisted collection.
The California statute of limitations on written contracts is 4 years (CCP §337). The clock starts when the cause of action accrues -- typically when payment was first due and not made. For oral contracts, the limit is 2 years (CCP §339). California also has a 4-year limit on claims based on the violation of a written obligation generally, which covers most invoice disputes. Do not wait more than 18 months to pursue a disputed California invoice in court: evidence becomes harder to produce and judges notice delay.