Escrow Protection: How Bidroom Payments Keep Everyone Safe

The Escrow Advantage

Construction payment disputes are among the most common problems in the industry. Bidroom's escrow system eliminates the risk by holding funds securely until work is verified complete.

How Escrow Works on Bidroom

Step 1: Funding

When a project begins, the owner funds escrow based on the milestone schedule. Funds are held securely - never in contractor accounts until work is approved.

Step 2: Work Completion

Contractors complete milestone work and submit for approval with:

• Progress photos
• Daily logs
• Material invoices
• Inspection reports (if required)

Step 3: Owner Review

Owners receive notification to review submitted work. They can:

• Approve - Release payment to contractor
• Request Changes - Note issues for correction
• Dispute - Escalate to resolution process

Step 4: Payment Release

Upon approval, funds transfer to the contractor minus the platform fee (2.9%). Lien waivers are required for payment release.

California Compliance Built-In

Our escrow system automatically follows California Civil Code requirements:

• 5% Retention Maximum - Per §8814
• Prompt Payment - Per §8850/§8811
• Lien Release Requirements - Per §8134

Benefits for Owners

• Never pay for incomplete work
• Documentation required before release
• Dispute resolution support

Benefits for Contractors

• Guaranteed payment for approved work
• No chasing unpaid invoices
• Clear milestone requirements

Learn more about structuring milestone payments for your project.