We’ve blogged about it several times before – California is one of 12 states that has regulated and statutorily provided lien waiver forms. This means that you should use the specific lien waiver form provided by California on all California projects. This blog will cover the California Conditional Lien Waiver and Release on Progress Payment.
If you’re tempted to add additional language to the form – stop! Doing something as simple as notarizing the waiver, which doesn’t ordinarily call for notarization, could interfere with the document’s validity.
Here is a guide to all the blank fields in this form to help you get it correct.
Guide to California’s Conditional Lien Waiver and Release on Progress Payment Form
A “progress payment” is an installment payment to the contractor, or in other words, a small partial payment on a larger contract that is proportional to the work done by the contractor actually performed during the payment period. Although not necessarily related directly to the construction industry, the Dictionary of Military and Associated Terms (US Department of Defense 2005) has a great definition:
Payment made as work progresses under a contract, upon the basis of costs incurred, of percentage of completion accomplished, or of a particular stage of completion.
If you’re exchanging a progress payment on a construction project, you’ll have two lien waiver form choices – Conditional and Unconditional. This post will cover the Conditional Waiver and Release on Progress Payment form.
The statutory California Conditional Waiver and Release on Progress Payment lien waiver form is the most common form to use in the case of progress payments, and it’s the safest choice. If you aren’t sure which of California’s 4 lien waivers to use, this one should be the default. Download Levelset’s California Conditional Waiver and Release on Progress Payment lien waiver form here.
How to Fill Out this Waiver Form:
Name of Claimant
This is the name the party receiving the payment, and the party who will ultimately sign the document to waiver their lien rights. Remember to identify the name of this party correctly. This sounds simple, but it’s very common to write the name of companies incorrectly, for example, to miss designations like Inc., LLC, etc., or to refer to DBAs incorrectly. See 3 mistakes lien claimants make when identifying themselves.
Name of Customer
This is the name of the party who hired the “Name of the Claimant,” and usually, the name of the party who will be actually making the payment. It’s possible that the party making the payment is not the “name of customer.” For example, if a property owner (paying party) is making payment directly to a subcontractor (name of claimant). In this instance, the “name of the customer” would be the general contractor. This scenario is typical when the parties are paying with joint checks.
Do the best job you can identifying the job location — which is the physical place where the work was performed or where the materials were incorporated into the project (i.e. not where the materials were shipped!). There are a lot of very strict requirements when identifying the job location in a mechanics lien claim, but the requirements for identifying the job location in a waiver are much more relaxed. A physical address will do just fine here.
This field should identify the property owner(s). Again, while this is pretty straight-forward, nuances about ownership could cause confusion. Here are some suggestions in common complex ownership scenarios:
- Multiple Owners: List all of the owners
- Work done for a tenant: List the tenant and the property owner(s)
- Work managed by a construction manager: List the owners, not the mangers
- On Public Projects: List the government office that commissioned the work
- P3 Projects: Identify developers
This field is very specific to “progress claim” lien waiver forms, and is very important. In fact, it’s worthy of an entire article and guide. What you put into this field is the most consequential field you’ll complete, and that’s because it determines what is waived and what is not waived by the document. The party signing this lien waiver document is agreeing to waive their claims for all work completed on or before the date entered into this field. Accordingly, the “progress payment” should completely compensate the waiving party for all work before on or before the date entered. Be careful that you identify the correct date (related to the work performed and paid for), and not just the date of the related payment application (which is irrelevant).
Maker of the Check
This field is straightforward if the payment is being made by check, but admittedly, it’s a little confusing if payment is being made by ACH, credit card, or something other than check. Here, you’ll just want to use common sense. In every case, there is a “paying party,” and that is the party who should be identified here.
Amount of the Check
This is the dollar amount of the payment. If payment is being made by ACH, credit card, or something other than a check, use common sense, and just enter the amount of the payment in this field.
Check Payable To
This field can be a little more confusing than the “maker of the check” and “amount of the check” fields, especially for payments made electronically or through some other payment method (i.e. cash!). Ultimately this field should list the party receiving payment. It’s possible that more than one party can receive the same payment, as is the case with joint checks, and in that instance you’ll want to put all parties here who are listed on the check.
The Progress Payment lien waivers in California have certain things exempted from the waiver by default, which is great for the parties signing the waiver, as they don’t have to argue about these things. Retention and retainage is excepted by default, as are “extras for which the claimant has not yet been paid,” and “contract rights.” If you have anything else that should not be waived, include it in the exceptions area. Further, since this is a progress payment waiver, the exceptions area specifically requires you fill out the following, as applicable:
- Date(s) of Waiver and Release: This field should list the dates of any waivers previously signed for on this project, if payment has not been already received on those waivers. If nothing applies here, you can write-in N/A, or leave it empty.
- Amount(s) of Unpaid Progress Payment(s): In this field, you’ll list the amount(s) of the earlier unpaid progress payment(s), if any.
This is the signature of the individual signing the document on behalf of the claimant.
This field should list the job title or role of the individual signing the document.
Date of Signature
This is simply the calendar date that the document is signed.
That’s it! Your California progress waiver should be complete.
Lien waivers are often overlooked but carry significant legal consequences. Hopefully this guide has clarified the form and its requirements.
Remember, if you are unsure which of the 4 possible California lien waiver forms you should use, then you should use this one, the Conditional Waiver and Release on Progress Payment form. It is the safest choice of the four.
For more guidance with California lien waivers check out Levelset’s guides to the other 3 lien waiver forms in California:
- California’s Conditional Waiver (Final Payment) Guide
- California’s Unconditional Waiver (Progress Payment) Guide
- California’s Unconditional Waiver (Final Payment) Guide