Legal Question in Construction Law in California

Ultimately it all boils down to whether the work is actually objectively incomplete and defective, according to the normal standards of the construction industry for the trades involved. You can "document" anything you want, but it doesn't make it so. Both you and the contractor particularly have a problem in that there is no written agreement on what the scope of work will be. That makes it very hard for either of you to prove whether the work is complete or not. If you have some documentation of what work the contractor agreed to do, even if it doesn't rise to the level of a written contract, that will help resolve that issue. If you don't even have that, then it becomes a lot of "he said, she said."

You are correct that the contractor has a problem due to not entering into a written contract with you, but that is between them and the Contractors State License Board. Failure to use a written contract, and/or failure to include required terms, is a license violation, not something the customer can sue for or use in defense against a contractor's lawsuit. Likewise, it is illegal to demand payment for work or materials that have not actually already been provided to the job (with some exceptions that only apply to big projects). However, that too is a license violation, not something a customer can sue or defend over. As for the 20-day notice, the 20-day notice only affects lien rights, not the right to collect money owed, and the general contractor doesn't even have to give a 20-day notice to the customer, only to the construction lender if there is one in order to assert a superior lien to the construction lender's lien.

Assuming you DO have proof of the scope of work he agreed to do, and proof it is not complete, and/or it is in fact objectively defective according to construction trade standards, then your best course is to immediately notify the contractor that the contract is terminated for abandonment of the job, and then file a complaint with the Contractors State License Board (www.cslb.ca.gov) and make a claim against the contractor's license bond. You can obtain information on your contractor's license bond from the CSLB as well.

Lastly, unless you previously confirmed that the contractor is in fact licensed, it is possible that you will find out he is not once you check the CSLB web site. I say this because licensed contractors are usually not this sloppy about conforming to the rules. If it turns out he is not licensed, not only do you not have to pay anything more, even if the work is actually complete and correct, you also have a right to sue him for a refund of anything you have paid him to date. The law is very clear that unlicensed contractors not only cannot collect if a customer refuses to pay, they must refund anything they have been paid on demand and can be sued if they don't.