A supplier is refusing to give us an unconditional final release until service charges are paid. However, they did not include the service charges in their conditional release.
2 replies
Aug 17, 2019
Absent specific information about the service charges and assuming all principal invoice balances have been paid in full, the supplier's refusal to tender the executed unconditional release is unwarranted. That's not to say that the service charges aren't justified, provided they are consistent with the supplier's agreement/policies. You should contact the CSLB for formal intervention: https://www.cslb.ca.gov/.
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Aug 19, 2019
I disagree a bit with the other answer here. Whether the supplier is required to provide the requested lien release is a more nuanced issue than let on.
Let's start with a general truth: A material supplier is only required to provide an unconditional lien release/lien waiver when the supplier is in receipt of the money that is being waived. A supplier, in other words, is never required to provide an unconditional lien waiver for amounts they have not been paid for.
Now, with the specific situation presented here, it sounds like a conditional waiver was signed by the material supplier. But without knowing more specifics, this does not translate into the supplier being required to sign an unconditional waiver. A conditional waiver is a waiver conditional on the receipt of certain, identified funds. When the funds have actually been paid, then the waiver is then automatically final. The "condition" has been fulfilled. There is nothing further required...including an unconditional waiver. The supplier is not required to sign another waiver.
Here, it sounds like you may want the supplier to sign another waiver that is "unconditional" and that goes above and beyond what they agreed to "conditionally" waive. The supplier may have real solid ground to refuse here.
There are some other possibilities, such as the supplier signing a conditional progress lien waiver that identifies all work done through a certain date, and that does not indicate any "exceptions" to the identified amount. However, this would start to get into some corner cases, and you'll likely be set up for a dispute with the supplier that may not be super black & white.