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Can my GC demand payment BEFORE a lien release?

I am a home owner with a very untrustworthy GC on my job. Is it legal in California to ask a client to pay in full BEFORE granting an unconditional lien release? I don't trust that once I've paid the GC he'll actually pay his sub. The GC is refusing to accept a joint check because he and the subcontractor are arguing about how much the subcontractor is really owed. The contract we signed with the GC stipulates that we have to pay him before he gives us a lien release. I'm concerned that if we've signed that contract, we have no choice.

1 reply

Mar 9, 2020

Unconditional mechanic lien waivers should really only be exchanged when payment is in hand. When payment hasn't yet been made - conditional waivers will generally be more appropriate. As for what's required - a GC will never be statutorily required to provide an unconditional lien waiver before they've gotten paid. And, when the contract also states that no lien waivers will be given until after payment is made, then there isn't really anything forcing a GC to provide any waiver (conditional or otherwise) prior to receiving payment. As mentioned above, conditional lien waivers are a good middle ground, if both parties can agree to their use. For a contractor, conditional waivers won't actually waive anything until payment has been made. For an owner, if they have a conditional waiver in hand and if they've actually made payment (and documentation proving that), then the conditional waiver in hand is just as valid as an unconditional one. More on that here: Unconditional Lien Waivers vs Conditional Lien Waivers.

Additional resources on California mechanics lien waivers

For more information on California lien waivers, and on collecting lien waivers in general, the articles and resources below should provide a lot of value. - California Lien Waivers Guide and FAQs - California Lien Waiver Forms & Guide – All You Need to Know - The Property Owner’s Guide to Lien Waivers

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