We recently received a question from a blog reader inquiring about lien waivers, and specifically, whether signing a contract with a no-lien clause extinguishes that party’s right to claim a lien in California.
We have previously addressed lien waivers generally here. Lien waivers pre-contract, or no-lien clauses written into the contract itself, are sure to cause consternation. While the best course of action for parties who want to keep their lien rights is to not sign a contract with a no-lien clause, what happens if that is not an option?
Well in California, and many other states, a pre-work no-lien clause is against public policy and unenforceable. California prescribes certain forms within the lien statute itself. If one of the 4 forms provided by the lien law statutes is not used, the lien waiver is not valid. California law further provides that a party may not waive lien rights for work performed or materials furnished after the date provided in the lien waiver, even if the proper lien waiver form is used – and that a party’s lien rights may not be waived by any other claimants. That is, a subcontractor’s lien rights may not be waived by a prime contractor.