Waive Not, Want Not: Waivers and Releases on California Construction Projects

Signing document

California is one of a handful of states (12 to be exact) which have statutory mandated waiver and release forms for construction projects.

So here’s what you need to know before you sign one (or two, or three).

What are California’s statutory waiver and release forms?

California has four statutory waiver and release forms for construction projects.

Which form applies depends on two things: (1) whether it is for progress payments or final payment; and (2) whether it is provided before or after you have been paid.

The four waiver and release forms are:

  1. Conditional Waiver and Release on Progress Payment
  2. Unconditional Waiver and Release on Progress Payment
  3. Conditional Waiver and Release on Final Payment
  4. Unconditional Waiver and Release on Final Payment

They may sound similar, but they’re not, as shown below:

Waivers and Releases - New Page-2

How are the waiver and release forms supposed to be used?

The waiver and release forms are intended to be used when progress payments and final payment are made on a construction project. By signing a waiver and release form you are waiving your right to record a mechanics lien, file a stop payment notice or make claim on a payment bond once you are paid.

Are the waiver and release forms limited to certain types of projects and are they required to be used?

The waiver and release forms can be used for both private and public works projects. Moreover, while they are not required to be used, if you do require that a release to be provided in connection with payment, then you must use the statutory waiver and release forms “in substantially” the same form as provided under statute.

Who signs the waiver and release forms?

Waiver and release forms are often  required by project owners from their direct contractors. Conditional waiver and release forms are required before payment. And unconditional waiver and release forms are required after payment.

Waiver and release forms may also be required by direct contractors from their subcontractors and material suppliers, and from subcontractors and their material suppliers from their second-tier subcontractors and second-tier material suppliers, and so on.

It is not unusual for a project owner to require their direct contractors to provide waiver and release forms for themselves (i.e., the direct contractor) as well as from subcontractors and material suppliers of every tier working under a direct contractor.

How do the waiver and release forms work?

The waiver and release forms are intended to be used together.

As an example, suppose you are a direct contractor performing work for a project owner. On your first progress payment, the project owner may require that you provide a Conditional Waiver and Release Upon Progress Payment together with your payment application as a condition of payment. On your second progress payment, the project owner may require that you provide an Unconditional Waiver and Release Upon Progress Payment for the first progress payment and a Conditional Waiver and Release Upon Progress Payment for your second progress payment as a condition of payment, and so on. When you reach the point of final payment, the project owner may require that you provide a Conditional Waiver and Release Upon Final Payment as a condition of payment and an Unconditional Waiver and Release Upon Final Payment once payment has been made.

Here’s an illustration assuming a hypothetical project with four payments:

Waivers and Releases - New Page-2

Can I use my own waiver and release form or change the language in the waiver and release forms?

Generally no. California’s waiver and release forms are mandatory, and while you can adjust the language in the  forms, beware if you do.  The Code sections which outline the language required in the waiver and release forms (Civil Code sections 8132, 8134, 8136 and 8138) state that a waiver and release “shall be null, void, and unenforceable unless it is in substantially the following form . . .” (emphasis added).

How do you complete the waiver and release forms?

The “fillable” sections of the waiver and release forms are generally the same for the Conditional Waiver and Release Upon Progress/Final Payment and Unconditional Waiver and Release Upon Progress/Final Payment.

For the Conditional Waiver and Release forms:

  • Name of Claimant: This would be your company.
  • Name of Customer: This would be the company with whom your company has a contract to perform work.
  • Job Location: The location of the project site.
  • Owner: The name of the project owner.
  • Through Date: This is the last date in which labor, materials and/or equipment was furnished under your pay application. So, for example, if the waiver and release is for your March 1, 2015 pay application, it would be through the last date in which labor, materials and/or equipment was furnished as indicated in your March 1, 2015 pay application.
  • Maker of Check: Typically, this is the company with whom your company has a contract. However, it could be another company if it’s a joint check.
  • Amount of Check: Again, typically, this is the amount of your pay application for the month.
  • Check Payable to: Again, typically, this your company, although it could be your company and another company if it’s a joint check.
  • Exceptions: Item (3): This section should be filled out if you have not been paid a previous progress payment.
  • Claimant’s Signature: Signature from someone at your company authorized to sign the waiver and release form.
  • Claimant’s Title: The title of the person signing the waiver and release form.
  • Date of Signature: The date the waiver and release form was signed.

For the Unconditional Waiver and Release forms:

  • Name of Claimant: This would be your company.
  • Name of Customer: This would be the company with whom your company has a contract to perform work.
  • Job Location: The location of the project site.
  • Owner: The name of the project owner.
  • Through Date:This is the last date in which labor, materials and/or equipment was furnished under your pay application. So, for example, if the waiver and release is for your March 1, 2015 pay application, it would be through the last date in which labor, materials and/or equipment was furnished as indicated in your March 1, 2015 pay application.
  • Claimant has received the following progress payment: Amount of the progress payment received.

Note: Remember a check is simply a promise to pay. As such, for those that are cautious, an unconditional waiver and release form should not be provided until payment is actually received, which in the case of a check, is when the check clears the bank upon which it is drawn.

  • Claimant’s Signature: Signature from someone at your company authorized to sign the waiver and release form.
  • Claimant’s Title: The title of the person signing the waiver and release form.
  • Date of Signature: The date the waiver and release form was signed.

If I’m a contractor and I complete and sign a conditional waiver and release form am I giving up  all my rights?

No. First, with a conditional waiver and release form you are only giving up rights once you are paid. However, an unconditional waiver and release form is just that . . . unconditional . . . and once you sign it you are indicating that you have been paid in exchange for giving up your rights.

Second, with respect to both the conditional and unconditional waiver and release forms you are only giving up your statutory construction payment remedies, namely, the right to record a mechanics lien, serve a stop payment notice and make a payment bond claim. You are not giving up rights to sue: (1) for retention (in the case of waivers and releases for progress payments); (2) for extra work in which you have not been paid; (3) for unpaid progress payments you specifically identify in the conditional waivers and releases; (4) for rescission, abandonment and breach of contract claims; and (5) for disputed claims you specifically identify (in the case of waivers and releases for final payment).

If I’m a project owner and a contractor refuses to provide an unconditional waiver and release form, what happens?

First, you shouldn’t have this problem when it comes to progress payments because you are presumably going to require an unconditional waiver and release upon progress payment form for the previous payment as a condition of receiving the next payment (see illustration above).

Where this problem occurs most frequently is when it comes to the unconditional waiver and release upon final payment because, at that point, you’re not holding any money as an incentive for your contractor to provide an unconditional waiver and release upon final payment (see illustration above).

But fret not. Even if your contractor refuses to provide you with an unconditional waiver and release upon final payment, you’re covered if the contractor provided you with a conditional waiver and release upon final payment. This is because a conditional waiver and release, whether it’s for a progress payment or final payment, effectively becomes an unconditional waiver and release by its terms upon the contractor’s receipt of payment.

94 Responses to “Waive Not, Want Not: Waivers and Releases on California Construction Projects”

      • Leona

        I have a question regarding waivers, can someone add late fees and finance charges on a lien release? Thank you Leona

      • Garret Murai

        Leona, that’s a very good question but, unfortunately, I don’t have an answer for you.

        The waiver and release statute doesn’t address whether you can include late fees and finance charges in a waiver. If I were a judge though, and not just an attorney, I would say you can’t and here’s the reason why: a waiver and release waives and releases a party’s right to record a mechanics lien, serve a stop payment notice and make a payment bond claim, and when recording a mechanics lien you are only allowed to claim the lesser of (1) the reasonable value of work provided by a claimant; and (2) the price agreed to by the claimant and the person that contracted for that work. Somewhat similarly, a stop payment notice can only include in a stop payment the amount due the claimant for work provided through the date of the notice. The payment bond statue is silent on the amount claimed.

        Thus, the amount you can claim when recording a mechanics lien and serving a stop payment notice would not allow you to claim late fees and finance charges, and thus, I would say that neither can you include late fees and finance charges in a waiver and release.

    • Ann

      We are a General Contractor. One of our Sub-Contractor provided us an Unconditional Progress Release through the current invoice date which I haven’t paid the invoice yet. the Unconditional progress release indicated that the claimant has received the following progress payment: $0.00. My question is do I (as the General Contractor) still need to request the Sub-Contractor for a Conditional Progress release through the current invoice date? Even though it’s going to be 0.00 amount on the release?

      Reply
      • Garret Murai

        Hi Ann. Thanks for reading. I may not be understanding the scenario completely but it sounds like the sub doesn’t know when to provide the proper release. Assume, for example, you get a pay app from the sub for $100, to keep things simple. In addition to the pay app the sub should be providing a conditional waiver and release upon progress payment indicating that once it receives a check for $100 that it will waive and release any statutory construction payment claims. Assume then, that you pay the sub $100, and the following month the sub submits another pay app but this time for $200. In addition to the pay app the sub should be providing: (1) an unconditional waiver and release upon progress indicating that it received payment for the previous month’s pay app of $100; and (2) a conditional waiver and release upon progress payment for the current month indicating that once it receives $200 that it will waive and release any statutory construction payment claims. As you’ve indicated, it seems that the sub is providing an unconditional waiver and release upon progress payment indicating “$0” paid, when it didn’t provide a conditional waiver and release upon profess payment FIRST indicating that IF it is paid its pay app that it will waive and release any statutory construction payment claims it may have. In short, it sounds like the sub is providing an “unconditional” before providing a “conditional,” which is backwards.

      • Jan

        As a subcontractor, I have skipped the Conditional and provided an Unconditional Progress Release for $0.00 when I know I don’t have any billing for that month and there isn’t any money due to us.

      • Garret Murai

        Hi Jan. Perfectly fine to do it that way so long as you are aware that an unconditional for that month is, as it’s name suggests, “unconditional.”

    • T. Lo

      Hi Garrett,

      We are a manufacturer and get asked for waivers often, my question is about an “Unconditional Waiver and Release on Final Payment”. If they are fully paid do i put $0.00 on exceptions “disputed ” claims?

      Reply
      • Garret Murai

        Hi T. I assume by “they,” you actually mean “we,” since you are the one who is being asked to provide the release. If so, and you have been fully paid and have no claims, then you would put down zero dollars.

    • Keevin Blue

      I agree with Darren, this was excellent. However, I do have a circumstance that was not addressed (or I didn’t get it). On a certain job, I issued 2 conditional progress waivers for two billings which since have been paid. Apparently, the GC we were under quit the job and now is asking for an unconditional final. They owe us no money, but my question is do I issue and unconditional progress or final waiver?

      Reply
      • Garret Murai

        Hi Keevin. Thanks. It depends on whether your scope of work is complete and, if not, whether you are going to complete your scope of work (since the GC you had a contract with is no longer on the project). If your work is complete or, if not complete, will not be completed (b/c the GC you had a contract with is now off the project), then I suggest an unconditional final. If your work is not complete but it looks like you may complete the work (for example, because your contract is being assigned), then I suggest an unconditional progress so as not to confuse the owner and others when you start to issue conditional progress waivers again.

    • Keris

      Hi Garret, I have a quick question. We are a mechanical contractor that does business nationwide, but currently working on a project in CA. Our GC is asking for $0 waivers for one of our subs’ vendors that is not yet billing on this project. We have told the GC that the vendor has no open invoices; further, this is cited on our subs’ sworn statement. However, the GC is stating that we are required to submit a $0 waiver every month until the vendor has been paid in full simply because they have filed a preliminary notice on the project. To your knowledge, is this information accurate? On projects in different states, I only am only required to provide lower tier waivers if the current net of any one period’s billing exceeds $10K. Is this different in CA? (Where can I find information on this?! Please help! Thank you!)

      Reply
      • Garret Murai

        Hi Keris. Unfortunately California’s waiver and release statutes don’t specify “how” to use waivers and releases, only that any waiver and release (if required in your contract) use language that is substantially the same as that set forth in the statutes. However, typically, a waiver and release is only required when a contractor, subcontractor, material supplier, or equipment lessor has provided work, materials, or equipment. Thus, if a subcontractor serves a preliminary notice but has yet to perform any work a waiver and release is typically not required of the subcontractor because the subcontractor has not performed any work, has therefore not billed for any work, and there is no need for a waiver and release because there is no concern that the subcontractor will record a mechanics lien, serve a stop payment notice, or make a bond claim. However, you specifically said that the GC is requesting a waiver and release from from a “vendor” which makes me think that the “vendor” is a material supplier. If so, the material supplier likely wouldn’t have served a preliminary notice unless the material supplier had provided materials on the project, in which case, it would make sense for the GC to ask for a waiver and release so it can confirm that the material supplier has been paid.

    • Tenisha Mayfield

      Question: We are a contractor and our subcontractor supplier gave us an unconditional Waiver for final payment for a project that is nearing completion. The supplier had a 20 day prelien that was satisifed. If the subcontractor does additional work say time and material work and used the same supplier for the same job as before do the unconditional final payment from the supplier suspersedes the prior unconditonal final payment? or do the supplier needs to submit another prelien for the new work?

      Reply
      • Garret Murai

        Hi Tenisha. Good question and one that wades into the weeds of the waiver and release statutes. Unfortunately, the there are a number of scenarios that the release statutes don’t address and your situation is one of them. Here’s my thoughts on it though: It depends on whether the “additional work” you make reference to is being performed by way of a change order or if it is truly additional or extra work. When you think about it you can add scope to an existing contract by way of a change order or you can add scope by entering into a new contract altogether. In the former situation, there is only one contract (the original contract) and in the latter situation there is a second contract (the new contract). If additional scope is added to an existing contract then, arguably, a new preliminary notice wouldn’t be necessary. However, if additional scope is added by way of a new contract, the supplier would, again arguably since the statutes don’t address this, need to serve a new preliminary notice. But there’s one other wrinkle as you point out, if it is change order work and the supplier has already provided an unconditional waiver and release upon final payment, what is the supplier to do if it is not paid for this change order work? Has it waived its statutory rights? My belief is that equitably it hasn’t because when the supplier provided the unconditional waiver and release upon final payment it had in fact been paid in full for all work within its original scope, and it would be inequitable to add scope by way of a change order, not pay the supplier, and then argue that the supplier’s earlier unconditional waiver and release upon final payment bars the supplier from recording a mechanics lien, serving a stop payment notice, or making a bond claim.

  1. Josh Cohen

    Clear and concise. Are you sure you’re an attorney? Also, 12 is more like 2.5 handfuls.

    Reply
  2. Mark Huber

    Would it not be more appropriate that the “Through Date” be the last date goods or services are rendered rather than the date of the pay application (in your examples March 1, 2015)? Typically, the date of our invoice is days later that the last date we performed services on the project site.

    Reply
  3. Ronny McNamara

    Hi Garret,

    You have very appropriately covered these vital documents with an easy to understand example. But these forms are great when every thing is fine with the world, contractors and sub contractors are doing their job and getting paid by the owner timely, at the end every body is happy. Problem arises, when owners and prime contractors start defaulting on payments.

    Reply
    • Garret Murai

      Hi Ronny. Absolutely right. There are numerous scenarios where something can go wrong, which for that very reason, we can’t cover every scenario here. That’s when you need an attorney (wink, wink).

      Reply
  4. Keith DeBrine

    Garret,
    A question that has arisen – On Progress unconditional lien wavier for payment #2: does the amount need to be cumulative or should it be for the amount of the prior pay application? For example: Pay Application #1 is for $10.00. Pay Application #2 is for $5.00. So should the amount of progress unconditional lien waiver you receive with Pay Application #3 be for $5 (the amount of Pay Application #2) OR Should it be for $15.00 (the cumulative amount of all previous Pay Applications that have been funded?)
    Thanks
    Keith

    Reply
    • Garret Murai

      Hi Keith. There is no place to put a dollar amount in the “unconditional” releases. Rather there is a “through date,” meaning that the party signing the unconditional release is waiving the ability to make a statutory payment remedy claim for work performed “through”‘the date indicated. The through date is typically the last date work was performed as indicated in the immediately preceding pay application.

      Reply
    • Garret Murai

      Keith. My apologies for my delay getting back to you. You are absolutely correct. I was looking at an unconditional waiver and release on “final payment.” On an unconditional waiver and release on “progress payment” the amount you would insert would be the amount of the progress payment you received for the earlier conditional waiver and release on progress payment which you provided, not the sum total of all progress payments received to date. So, in your hypothetical, it would be the $5 not the $15.

      Reply
  5. Jan

    Are General Contractors allowed to make a Subcontractor reduce the amount they have progress billed and reduce the Conditional On Progress accordingly?

    Reply
    • Garret Murai

      Hi Jan. I don’t understand your question. Generally, a pay application (whether for progress or final payment) will be accompanied by a conditional waiver and release in the same amount as the pay application.

      Reply
      • Jan

        Correct. But some time later, maybe 45 days, the GC says they have to have us revise our invoice and conditional to a lower amount. My thought is they were approved less by the owner and want to reduce what we are going to be paid. I went to a class on lien some time ago and they made it clear that the owner or GC cannot dictate what you are progress billing. If they pay less than what the conditional is for what is the proper thing to do? Can they make us lower our invoice/cond release?

      • Garret Murai

        Hi Jan. I’m still not sure I understand what is happening, but I agree you should not have to revise downward the amounts contained in your pay application or conditional waiver if the amounts represent work your company actually performed. Your pay application is your demand for payment, and the conditional waiver conditionally waives any mechanics lien, stop payment notice or bond claim rights you might have with respect to the amount contained in the pay application.

      • Jan

        We progress bill around the 20th but project out what we think we will get accomplished by the end of month. If we bill for 75% but the GC says we are only approved for 65% can they make us change our billing and conditional lien? This is a particular problem if they wait too long to request/demand this because it messes up the billing for the next month as well. Am I making myself clear yet? I have had to revise, delete, void invoices for a few GC’s and I don’t think they have the right to make us do this.

      • Garret Murai

        Hi Jan. If you are invoicing for work yet to be completed and there is a legitimate dispute that you have not accomplished the percentage complete you have invoiced for, then yes, the GC can ask that you revise your invoice and waiver and release. The GC doesn’t want you to “get ahead” of your actual percentage complete because the GC then runs the risk that you will walk off the job after you have actually only completed say 75% but have paid you say 90%. If, however, you believe you have actually completed the amount indicated in the invoice and waiver and release, you should then argue that with the GC.

      • Jan

        I agree with you on that. But, they wait so long to dispute our invoice that I have already submitted the next months progress billing and it is difficult to alter at that point. Especially if it has been reported to the Board of Equalization – I won’t alter at that point.
        I have told them they need to contact us sooner if they disagree with our % of completion.

  6. Kay

    As a sub-sub, if the contractor above us, a sub of a GC pays us the appropriate payments on a job and asks me for an interim waiver on said job through the appropriate date, showing a zero balance, etc, but still has outstanding money with me on another job, can I refuse the waiver for job #1 as an incentive for him to satisfy his accounts on job #2. I do not believe that this is valid or legal, however others seem to think the practice is completely fine. If we have filed a preliminary NTO on a job, are we not obligated to complete the waivers as they pertain to each job as payments are made regardless of what outstanding issues we have with the sub on other jobs?

    Reply
    • Garret Murai

      Hi Kay.In my view there are actually two questions here. First, can a contractor refuse to provide a waiver and release. And, two, if a contractor can refuse to provide a waiver and release, can that contractor refuse to provide a waiver and release on one project as means of getting paid by the same paying party on another project. As to the first question, unless your contract requires that you provide a waiver and release in exchange for payment, you are not required to provide one. Civil Code sections 8132, 8134, 8136 and 8138 – the waiver and release statutes – each begin by saying “if” a “claimant is required to execute a waiver and release in exchange for, or in order to induce payment of” a progress or final payment. So, unless required by contract, you are not statutorily required to provide a waiver and release. The second question is guided by the first. If you are required to provide a waiver and release, you can’t refuse to provide a waiver and release because you haven’t been paid on another project by the same paying party because you would be in breach of contract on the project in which you have been paid. There’s a pragmatic issue here as well, I think. If the waiver and release being requested is a “conditional” waiver and release, and you are required by contract to provide one, but you refuse to do so, how will you get paid? Alternatively, if it’s an “unconditional” waiver and release, and you are again required by contract to provide one, but you refuse to do so, who will you get paid your next payment? Moreover, under the waiver and release statutes, a “conditional” waiver and release automatically becomes an “unconditional” waiver release upon receipt of payment in any event, so threatening to not provide an “unconditional” waiver and release when you have already provided a “conditional” waiver and release, isn’t much of a threat.

      Reply
  7. Denise

    Hi. We are a GC and one of our sub contractors lost their license and insurance during the project. We paid them in full anyway and even took their employees on our payroll to finish the work. Now the sub contractor will not provide us with an Unconditional Final unless we sign a document stating that we will not go after them for the 20,000 we paid out above their contract amount. What do you suggest we do?

    Reply
    • Garret Murai

      Hi Denise. I can’t give you specific advice, but I would take a look first at your subcontract with the subcontractor to see whether they are required to provide waivers and releases. If so, and if they refuse to do so, they may be breach of contract.

      Reply
  8. Arcy QUezada

    We are the owners of a project. I have a Sub that has suppliers on the job. I asked for Conditional Lien Waivers. The suppliers are not owed any monies at this time. The Sub provided me with Unconditional Progress releases with a Zero amount. I understood the Unconditional Progress releases to be a receipt of payment and always have an amount. Was I trained wrong?

    Reply
    • Garret Murai

      Hi Arcy. You are correct, unconditional waivers and releases are provided after payment, not before. However, they usually do not have an amount (unless there is a disrupted amount), and in the case of an unconditional waiver and release upon progress payment, include a “through” date. Examples of California’s statutory waivers and releases can be found on our blog under the “toolbox” menu, so that you can get an idea of what they do and don’t include.

      Reply
  9. MLCH

    If a financing company needs a lien waiver from a California-based construction company or manufacturer for a project that is located *outside* of California, do we still need to use the California form? Or is the CA form only relevant for projects located in-state?

    Reply
    • Garret Murai

      Hi. I got your telephone message as well. The California waiver and release forms only apply to projects located in California.

      Reply
  10. Brett Houser

    In the case wherein a progress payment was made and the GC , subs and all suppliers provided their conditional waiver and release and subsequently the pay application is disputed. The GC then submits the next pay application and conditional waivers and releases. What is the appropriate action the architect and owner should take in reviewing and processing the subsequent pay application?

    Reply
    • Garret Murai

      Hi Brett. Happy holidays. This is a prompt payment issue. Under Civil Code section 8800, a project owner can withhold up to 150% of any amount disputed in good faith without being subject to prompt payment penalties. So, if payment was made by the project owner, and it is later disputed by project owner, the project owner can withhold up to 150% of the disputed amount in the next pay application without being subject to prompt payment penalties.

      Reply
  11. Monica

    We are a subcontractor an accidentally listed the wrong dollar amount on the Unconditional Release (Progress) can we retract the release with the correct dollar amount?

    Reply
    • Garret Murai

      The Code doesn’t address this situation but I would go ahead and send a revised (or amended) unconditional waiver and release in exchange for progress payment.

      Reply
  12. Mike

    My company is a material supplier. We did work for a sub and have been paid in full over 6 months ago. The sub asks for unconditional progress releases every month for $0 dollars. Can I simply send them an unconditional final to release my lien rights so that I no longer need to fill out these unconditional progress releases every month?

    Reply
      • Mike

        Thank you for your quick reply. And great article by the way. It’s nice to be able to find such a well written article to help with such an important aspect of asset protection.

  13. Melinda

    Hello, Loved reading your article Thank You – My understanding is in this order correct me if I am wrong. I am a person that LEARNS by scenarios….. If you could please review and Guide me in the correct order. (Contractor Liens)

    1. With the BID you attach “Professional Lien? is there another name for the lien?
    2. With the Bill you would attach “Conditional Lien” and also would use this form for request of Partial Payments? Confused the difference between conditional and unconditional? or would you use the unconditional lien for a Change Order?
    3. “Pre Lien” is the next step and goes through a company?
    4. “Professional Lien” is for Final payment?
    5. Progressive Payments – should follow in the same order above?

    Much appreciate Melinda from San Diego.

    Reply
    • Garret Murai

      Hi Melinda. Let me see if I can try to clarify things. First thing first, what are waivers and releases? By signing a waiver and release, as their name implies, you are waiving your right to record a mechanics lien, serve a stop payment notice or bring a claim against a payment bond for the amount stated and are releasing the party who is paying you from such claims. Importantly, a waiver and release only waives your mechanics lien, stop payment notice, and payment bond rights not any breach of contract claims you may have. Second, there are four types of waivers and releases and their use will vary depending on whether you are receiving a progress payment or final payment and will vary depending on whether you are anticipating payment or have already received payment. And, finally, there is how you use them. Suppose you are a subcontractor and perform work for a general contractor. Suppose further that you bill monthly and you start work on January and finish your work in March. At the beginning of February you issue your first invoice for work done in January in the amount of $10,000. Together with your February invoice you would send a conditional waiver and release upon progress payment for $10,000. In March you issue an invoice for $15,000, and assuming you were paid your February invoice, you would send together with your March invoice an unconditional waiver and release upon progress payment (for the $10,000 you were paid for your February invoice) and a conditional waiver and release upon progress payment (for the $15,000 you are owed in March). Finally, in April you issue your final invoice for $20,000, and assuming you were paid your March invoice, you would send together with your April invoice an unconditional waiver and release upon progress payment (for the $15,000 you were paid for your March invoice) and a conditional waiver and release upon final payment (for the $20,000 you are owed in April). After your final bill is paid you would then provide an unconditional waiver and release upon final payment indicating that you have been paid in full. That’s how it works.

      Reply
  14. Sam

    We are a material supplier. What happens when a Sub uses a credit card to pay for materials and we have to supply an unconditional release? Most credit card transactions can be disputed with the credit card provider for up to six months.

    Reply
    • Garret Murai

      Hi Sam. You raise a good and interesting point. I believe, however, that you typically only have 30 to 60 days to dispute a credit card transaction. Nevertheless, as you point out, you can run into problems if your customer pays you by credit card , you provide an unconditional waiver and release and the customer later disputes the credit card transaction. You can, of course, refuse to provide an unconditional waiver and release until 60 days (or, to be safe, 90 days) have elapsed from the time of the credit card transaction but this may not be a viable business transaction. The alternative is to simply prove up the credit card charge(s) in the event the customer disputes the credit card charge.

      Reply
  15. BARRY

    Hi Garret,
    We are a supplier of rigging and safety products to a job in California. There is no contract or agreement with our customer, who is based in Florida. The customer issues a verbal purchase order, often after we have provided a quote but sometimes without one. We deliver the items to the jobsite on our truck. Currently the customer has three checks that they want to mail to us as payment (in full) on three separate orders/invoices. They have sent us three Conditional Waiver and Release on Progress Payment forms for us to sign and return. We do this all the time and have no issue with it. However, they are requesting a notarized release form for each payment before they will release the check. And upon receipt of the check we are to mail (2) copies of each original signed, notarized, Unconditional Release Form back to them. This is a minimum of 2 notarized signatures per payment? We requested that they cover the notary cost of $10.00 per signature and so far they have refused, saying that California Law requires that the forms be notarized?
    It is not so much the actual cost of the notary as it is the time involved having a key employee run to a notary for each payment.
    Are we required to have the forms notarized?

    Reply
      • Miguel L Martinez

        Hi Garret,

        I somewhat in the same position as Barry in my Contractor wants all waivers notarized. (I do notice this is only asked of me when we are working on a military base though). However I put Through date of 6/31/16 instead of 6/30/16 and the company wants me to make the change which requires me to get the paper notarized all over again. This is another $10 + my wage + gas+ my time. I asked if their employee or I could just hand write in 0 but they are telling me no. Is it a huge deal if I just do it anyways? Thank you for your time, it is very appreciated.

  16. Miguel Franco Vinales

    Hi Garret,
    Thanks for the article, very useful information. We are a general contractor and I was wondering if we should get lien releases from every single crew member from our subcontractors. I guess the question is, can a crew member of one of our subs file a lien against the owner if he doesn’t get paid by our sub?

    Reply
    • Garret Murai

      Hi Miguel. While laborers can record mechanics liens and, therefore, there is some logic in getting a waiver and release from laborers, it isn’t typically done and you would likely get some resistance from your subcontractors.

      Reply
  17. Tina B

    Hi Garret:

    Thank you for your very informative and helpful post. If a supplier does not file a preliminary notice for a public works project. Is it necessary to get a release from them? Will it hinder the contractor if a release is not requested?

    Thank you very much in advance.

    – T

    Reply
    • Garret Murai

      Hi Tina. This is where the intersection of the law and practicality meet. There is an exception to the preliminary notice requirement for payment bond claims. Thus, to be safe, particularly on public works projects where payment bonds are often required, requiring that all subcontractors and material suppliers provide releases (irrespective of whether they served a preliminary notice) may be a prudent thing to do. However, general contractors often have numerous subcontractors and material suppliers on a project so getting a release from every subcontractor and material supplier of every tier can also be burdensome.

      Reply
  18. Christopher Lee

    Hi Garret,
    Much appreciated on your assistance regarding lien releases. I have a question. I have provided my second conditional progress that shows an exception amount as I haven’t been paid from the first pay app. We received payment after the second lien release and I provided an unconditional progress showing payment was received for the first pay app. Do I have to send them a revised second lien release to remove the exception amount? Or does the unconditional progress showing that payment was received good enough for the GC?

    Reply
    • Garret Murai

      Hi Chris. I’m a bit confused when you say you provided a “conditional progress that shows an exception amount” since the statutory conditional waiver and release upon progress payment does not include a space to include an exception amount. The only statutory waivers and releases which include a space for an exception amount (technically, disputed claims for extras) are the conditional and unconditional waivers and releases upon final payment. You may want to take a look at the sample waivers and releases we have on our the blog which also reference (at the top of each form) the Civil Code sections where you can find the statutory waivers and releases – https://calconstructionlawblog.com/toolbox/.

      Reply
      • Christopher Lee

        Hi Garrett,

        Thanks so much for your reply. The exceptions section I am referring to on the Conditional Progress lien release is a section that included on all templates. (an example template – https://www.rosendin.com/sites/default/files/PDF_Files/ConditionalWaiverAndReleaseOnProgressPayment.pdf )

        The Exception part will state –
        This document does not affect any of the following:
        (1) Retentions.
        (2) Extras for which the claimant has not received payment.
        (3) The following progress payments for which the claimant has previously given a conditional waiver
        and release but has not received payment:
        Date(s) of waiver and release:________________________________________
        Amount(s) of unpaid progress payment(s): $_____________________________
        (4) Contract rights, including (A) a right based on rescission, abandonment, or breach of
        contract, and (B) the right to recover compensation for work not compensated by the payment.

        Are you aware of this section I am referring to? I am referring to part (3) shown above.

      • Garret Murai

        Chris. That was my bad. Provided that the “through date” is the same, your unconditional waiver and release upon progress payment suffices and there’s no need to send a revised conditional waiver and release upon progress payment.

  19. Rebekah

    Hi Garret,
    Thank you for all of this useful information! I have a few questions.
    I am a CM on a public works project. Is it true that only companies (suppliers, subs) who file a preliminary notice are required to submit waiver & release forms? If so, when you reach the end of their billing, would it normally equal or be close to the amount on the prelim?
    Or should the GC collect Conditional waivers from everyone who bills the project?
    Our client was asking for $0 waivers from everyone even if they did not bill the project. As you said earlier, it’s difficult to know WHO these should come from if they haven’t billed for anything yet. I am trying to straighten this out for them as I don’t believe they completely understand the process.

    My other question is, on another project, they have been accepting Unconditional waivers from subs/suppliers without a previous Conditional waiver being sent. Is that sufficient? I wouldn’t think so being that the client would not have anything to compare to.

    Thank you!

    Reply
    • Garret Murai

      Hi Rebekah. Waiver and release forms are not statutorily required, however, many owners and GCs require them in their contract to protect themselves. Waivers and releases can be required even if a party did not serve a preliminary notice since a party can still make a payment bond claim (if there is one on the job) without having first served a preliminary notice. Waivers and releases may or may not total up to the amount stated in a preliminary notice since change orders (both additive and deductive) occur on a project. And finally, as to unconditional waivers and releases, it is fine to accept unconditional waivers without a corresponding conditional waiver since the unconditional waiver simply provides that the party providing the unconditional waiver has been paid through the “Through Date” (in the case of unconditional waivers on progress payments) or has been paid in full for the entire project (in the case of unconditional waivers on final payment). The only risk in accepting in unconditional waivers only is that you may pay someone but they may refuse to provide you with with an unconditional waiver.

      Reply
      • Garret Murai

        Rebekah, one amendment to what I said above. You do not need to obtain a waiver and release from someone who is not entitled to serve a preliminary notice. So, for example, you don’t need to ask PG&E for a release even though it supplies power to the project because PG&E isn’t entitled to serve a preliminary notice to begin with.

  20. Carmen Escobar

    I have a question. Are we required to get an Unconditional Waiver and Release form back from a Consultant? the consultant is filling out a Conditional Waiver and Release form with their Invoice and Progress Release form. Does a vendor who provides only Blueprint services need to fill out an Unconditional Waiver form?

    Reply
    • Garret Murai

      If the vendor only provided blueprint services you would not need a waiver and release (either a conditional or unconditional) from that company because it couldn’t record a mechanics lien, serve a stop payment notice, or make a payment bond claim in the first place.

      Reply
  21. Julie johnson

    I have a situation with a general contractor. We are a sub contractor to the GC. The contract with this GC is a single contract for 9 buildings. We are progress billing them for each building in thirds as it is completed. We send progress billings each month with the pay app, schedule of values and conditional progress release. On our invoice we show a gross billing, retention amount and a net billing. The conditional progress release provided to the GC is for the net billing. I am being asked by this GC to bill 90% only with no retention on the invoice and provide a conditional progress release for the invoiced amount. He is requesting that I submit a conditional final release for the 10% retention with each invoice, even though it is not on the invoice. Normally I provide a conditional final release when the job is complete on all 9 buildings and I am billing for the retention on all 9 buildings and work is complete. I have never provided more than one conditional final release on any of our past projects. My question is can I provide more than one conditional final on a single contract, in this case it would be 9 separate conditional final releases. If so can I put the amount of the previous conditional finals on the disputed line if they have not been paid? We anticipate this project to be complete within two years. He has not been clear if he will be releasing the retention on a per building schedule or waiting until all 9 buildings are complete.

    Reply
    • Garret Murai

      Hi Julie. The statutory conditional waiver and release on progress payment states that it “does not affect” retention. Thus, there should be no issue with providing a conditional waiver for the “net” amount while still identifying withheld retention in the invoice. Providing multiple conditional final releases for retention isn’t necessary. The invoices indicate the amount of retention withheld, the conditional progress indicates the net amount (less retention) owed, and at the end of the project you will submit a final billing (including retention) and provide a conditional final.

      Reply
  22. Doug

    Garret.. This is an excellent description of the lien waiver process.
    I do have one question. We are a subcontractor and typically use suppliers on our projects.
    I have a GC that asks us to reduce the amount of our conditional progress releases by our supplier amounts. I have done this a couple of times in the past but it just seems wrong to me.
    I believe it is their way of accounting for the joint check dollar amounts to my suppliers and how much our check amount will be.
    What do you think of this process? are we giving up lien rights when we do this?

    Reply
    • Garret Murai

      Hi Doug. Thanks for reading. I agree with you. The conditional waiver and release upon progress payment form includes a section to indicate the amount of the check to be received and the unconditional waiver and release upon progress payment form includes a section to indicate the amount of the check received. A joint check, while jointly payable, is still payable to your company and should be included. The drawback if it is not included as I see it (and it really is more of a drawback for the GC), is that if you don’t include the amounts you owe to your suppliers then it could put the GC at risk that you will come back and say you weren’t paid in full.

      Reply
  23. Steve Jenkins

    Garret, I live in CA and contracted with a window company for a project that included bay windows and several other windows and sliding doors. The bay windows originally brought (12/15/16/) for installation didn’t even meet egress codes and were the wrong dimensions compared to what they were replacing. I informed the window company owner that he would need to come out again to get it right. He then informed me this time that he wouldn’t be able to replace my existing bay windows with ones of the same size. As a result, I then told him he would be responsible for rebuilding the decorative brick wall that rested under the bay window to ensure it extended only as far as the new bay window. He agreed. He then reordered the windows to ensure they met egress codes. When these windows arrived in early January, after the installers mounted one set of the bay windows and demo’d the brick wall under both of them, I opened up the windows and noticed that these windows STILL didn’t meet the CA egress codes. I told the crew to stop and get the owner on the phone. After meeting with him two more times, it appeared we finally found a solution to the windows but then I stopped hearing from them and I sent them a Registered Letter informing them that because of the negligence and inability to deliver a product that resembled my current bay windows, I was only to pay him 50% of the remaining balance. After speaking with the contractor and confirming he received my letter and understood my intentions regarding the final payment, I want to ensure I have covered myself in terms of any remaining liability because I will be paying a final amount that is different than what is on the contract. Which Waiver and Release Form do I use and is there a PDF template available that I can populate online and then print out to give him as I hand over the final payment?

    Reply
    • Garret Murai

      Hi Steve. You should ask the general contractor to provide you with an unconditional waiver and release upon final payment on behalf of his company and all subcontractors and material suppliers from you have received preliminary notices. The one thing to note, however, is that a waiver and release only releases mechanics lien, stop payment notice and bond claims, it does NOT release breach of contract claims. Thus, you should ensure you have something in writing whereby the general contractor is agreeing that the final payment you will be making is in full satisfaction of your construction contract with the general contractor.

      Reply
  24. Marisa

    I am a sub and have a GC asking for lower tier suppliers waiver. They want total amount paid & outstanding amount to date. It just so happens that I am paid in full, sometimes i may not be at the time of the waiver but why do have to tell the GC what I paid for my materials.

    Reply
  25. Rene Ward

    Hi,
    My client is asking us to put the amount invoiced less retention on our release. For example I billed for 10k. She wants us to list 9k on waiver. No one has ever asked for waivers like this. What is the standard and correct way to send them.

    Reply
    • Garret Murai

      Hi Rene. Isn’t the amount invoiced already less retention? So, for example, if you performed $10k worth of work, and retention is 10%, then the amount invoiced should be $9k. Therefore, you should provide a conditional waiver and release on progress payment for the $9k, and once that amount is paid, you would provide an unconditional waiver and release on progress payment for the $9k received.

      Reply
  26. Christian

    Garrett,
    I am a homeowner (CA) and my contractor asked me to sign an unconditional waiver form after the project is done. I did not pay the final balance due to several damages to my kitchen cabinets. They made extra holes in the cabinets that it shouldn’t be there, and never replace any of them in the process. My question is, do I have to pay the final balance?

    Reply
    • Garret Murai

      Hi Christian. If by “unconditional waiver form” you mean the statutory waiver and release for final payment, it’s something that the contractor signs, not the project owner.

      Reply
  27. Nick

    Hi Garret, I have a question about the bracketed section below form the waiver:

    NOTICE TO CLAIMANT: THIS DOCUMENT WAIVES AND RELEASES LIEN, STOP PAYMENT NOTICE, AND PAYMENT BOND RIGHTS UNCONDITIONALLY [[AND STATES THAT YOU HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS]].

    The sentence “and states that you have been paid for giving up those rights” makes it sound like the customer should be paying an additional fee to the contractor to give up those rights, not that the payment for services was made. Am I interpreting this incorrectly? I’m trying to figure out why a contractor would sign this and give up their rights without an incentive. Thanks.

    Reply
    • Garret Murai

      Hi Nick. Thanks for reading. The bracketed section could be better stated but it’s the language required under the statute. The bracketed language simply means that by accepting payment the contractor no longer has the ability to record a mechanics lien, serve a stop payment notice or pursue a payment bond claim for the amount received.

      Reply
      • Nick

        Thanks for the response Garret. So why sign the document if payment has been made and there is no outstanding balance that would create a lien?

      • Garret Murai

        Hi Nick. First, just to be clear, the statutory waivers and releases are signed by contractors not project owners. I just want make sure there’s that baseline understanding because your question might suggest some confusion on that point. Having said that, the reason why project owners want their contractors to sign the statutory waivers and releases is so that “if” a contractor records a mechanics lien, serves a stop notice or makes a bond claim the project owner has a document it can present to a court showing that the contractor waived its rights to do so.

      • Jan Christensen

        We are a subcontractor and have had a few GC’s that are terrible at paying. I have had to alter invoices to a lower amount just to get a payment and that is irritating enough but what I would like to know is #1) can we refuse to sign their version of an Unconditional on Progress that does not show that they still owe money within the Through Date of that release? There were approved Change Orders and several Extras that are still outstanding so I noted those on our Conditional releases as well as any Unconditional releases I have sent to them. BUT, when we go to pick up the check…they bring out THEIR version of an Unconditional which is nice and clean and says we have been paid in full through a specific date and it is just not accurate. We feel forced to sign said release in order to receive the check. I believe they want this clean (but inaccurate) lien release so they can keep the owner happy (yet in the dark) about what is really happening. #2) What are our rights as far as work we Know we have completed, yet the GC says it hasn’t been approved? #3) Shouldn’t we always write in what is still outstanding if it is within the “through date” period? We are owed money on July 2016 invoices for Extra work and I don’t think they want the owner to see this list I have written on the releases.

        Thanks for all your wonderful knowledge

        Jan Christensen

        Office Manager

        jan@championsplumbing.com

        Champion’s PLUMBING & HEATING, Inc.

        281 Arthur Road Martinez, CA 94553

        Ph 925-372-0881 Fax 925-372-9448

      • Garret Murai

        Hi Jan. As to the Unconditional Waivers and Release on Progress Payment forms, by signing the form, you are agreeing that you have been paid through the “through date” with the exception of retention, extras and certain contract rights, only. Second, with respect to your rights as to work completed but which the GC has said hasn’t been approved, ideally, you should not be doing any work unless you have a change order or your contract permits change directives. If you haven’t been paid, then depending on your situation, your recourse would be to record a mechanics lien, serve a stop payment notice (this is less typical on private works job), or file a lawsuit. Finally, with respect to writing in the amount of extra work performed, you can, but it is not necessary, since each of the waiver and release forms either reserve your right to make a claim for extra work or, in the case of the Unconditional Waiver and Release on Final Payment, allows you to indicate the amount of your extra work claim.

  28. Michael

    I read your article with interest, and I was surprised that as a homeowner I left myself vulnerable to double payments with all my past home improvement contracts.
    Additionally, while I am very sympathetic to the idea that everybody in the value chain gets paid what they are entitled to, I am having a hard time how, for practical purposes, the homeowner can assume the role of collection enforcement for all n-tier subcontractors and suppliers (n >= 1). The way I read it, not only would it appear that this would entail a crazy amount of bureaucracy and paperwork if done properly, if every sub-sub[…]-contractor or supplier down to every tier in the supply chain needs to exchange lien waivers with the homeowner at every stage in the project, and homeowner’s progress payments split into the respective contributions attributable to every n-tier subcontractor, and joint payment checks be processed and signed; but also, I am having a hard time understanding how the homeowner would gain knowledge of who are the 2nd and higher tier subcontractors and suppliers (even if direct subcontractors were listed in the contract, which never was the case for me).
    I recently had a patio cover erected that required steel beams, and the GC hired a painter, among others. How would I know where the GC bought the steel beams? Even if I knew, how would I know where the steel manufacturer/contractor bought the iron ore, and where the painter bought the paint, and how would I control whether all those entities and suppliers got paid whatever they are entitled to according their supply or service contracts, that I am not even a party to?
    If I don’t, am I vulnerable to double payment? None of my past home improvement contracts in CA specified lien waivers as a requirement for payments. Couldn’t an unscrupulous contractor easily collude with their suppliers and extract double payments from homeowners? I would appreciate if you could shed some light on the practical implementation of the legal framework.

    Reply
    • Garret Murai

      Hi Michael. You’ve posed a lot of questions today. The short answer is that, with the exception of a contractor who you are directly in contact with (and who you would obviously know the identity of), as for other lower-tiered parties you would know who they are because in order for them to record a mechanics lien or serve a stop payment notice they would have to serve you with a preliminary notice which identifies who they are, what work or materials they have or will be providing, and an estimate of the value of that work and materials. There may be others who perform work or provide materials, but if you don’t receive a preliminary notice from them you don’t have to worry about them, because they need to serve you with a preliminary notice as a condition of recording a mechanics lien on your property or serving you with a stop payment notice.

      Reply
      • Michael

        Point well taken. What an excellent blog! I thought along the same lines when reading your article. However, I also read your article from April 1st 2013 on preliminary notices, which allow liens covering up to 20 days prior, and combining the information from your articles, it would appear that there is a 20 day window of vulnerability for the homeowner, while the homeowner waits hoping for his or her progress or final payment to “trickle down” the tiers in the value chain (OR NOT, which he has no control over). I’m sure I missed something and there is a solution to this.

      • Garret Murai

        Thanks Michael. You are correct that there is a “potential” 20-day window of vulnerability. For example, say you are in your last month of construction and a painting subcontractor is hired by the general contractor to paint the interior (or exterior) of a house, which is typically one of the last things done, and the painting subcontractor starts on the first day of the month and finishes on the 10th. Further, assume that the general contractor sends a final invoice on the 15th. Because the painting subcontractor has 20 days to serve a preliminary notice, if you pay the general contractor before the 20th, you may not receive a preliminary notice from the painting subcontractor and know that you should request a waiver and release from that subcontractor. The solution to this potential problem is to wait at least 20 days to pay the final invoice (the Code gives you 45 days) to see if you receive any last minute preliminary notices before paying the final invoice. The one risk you will always have though (the legislature for some reason chose not to address this) is that a laborer is not required to serve a preliminary notice before recording a mechanics lien. Thus, there is the potential that a laborer can record a mechanics lien after you’ve made your final payment and within 90 days of completion of the project which is the deadline to record a mechanics lien. The 45-day final payment window, unfortunately, won’t help you here.

  29. Michael

    The CSLB refers to “laborers” in addition to “subcontractors” in most of their informational material (“A mechanics lien is a “hold” against your property, filed by an unpaid contractor, subcontractor, laborer, or material supplier”…)
    What is the definition of “laborer”, in contrast to a “subcontractor”?
    Would “laborers” include employees of the contractor, and can employees file liens on the homeowner’s property?
    My construction contracts specifies “no subcontractors”. Are day laborers considered subcontractors?

    Reply
    • Garret Murai

      Hi Michael. Laborers are individuals who perform work on a project. They are typically employees of the contractor, but if your want to be technical, they could also be union laborers who provided under a collective bargaining agreement.

      Reply

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