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Can we deposit a partial payment that the GC calls final payment, and not lose our ability to collect on the balance of the invoices?

CaliforniaConstruction ContractMechanics Lien

We are a material supplier. We were contracted to supply material to a job (contract is with a GC) . We filed 3 pre liens, one for the initial contract and two for change orders. We have all the CO's that were approved and the tracking to prove delivery. The General contractor has stated that he is only going to send 50% of the total invoice and the payment will be complete. Can we cash that check and still file a lien for the balance of the invoices?

1 reply

May 14, 2018
That's a tough call. Under § 8430 of the California mechanics lien statute, a lien claim may be made for the lesser of (1) The reasonable value of the work provided by the claimant. (2) The price agreed to by the claimant and the person that contracted for the work. When a claimant is offered "final" payment in an amount less than the agreed contract price, the claimant is at risk of losing their lien rights for the remainder of the check. By cashing a check designated for final payment, it is certainly possible that, in the eyes of a court, the claimant would be agreeing to a new price for the work provided. If that's the case, a claimant would no longer retain the right to file a lien. This is because their "new" contract price would have been fulfilled, and a California lien claim may only be filed for the lesser of the reasonable value of the work provided or the contract price.
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