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Contractor is requesting an Unconditional Waiver on jobs we have not been paid on yet.

CaliforniaLien DeadlinesLien WaiversMechanics LienPreliminary Notice

We have a customer that is requesting an Unconditional waiver on a project. The waiver that they sent over states that it is valid "Through Date: 7/20/2018". We have two projects with them, and the earliest start date is 7/26/2018 which we submitted prelims for. I am weary to sign this unconditional because we have not been paid for our open invoices as of today. He claims that the GC is requesting this unconditional waiver for anything prior to 7/20/2018 because the prelim that we submitted is of course valid for anything 20 days or prior to the submitted date. My question is: If I sign this Unconditional Waiver, does it affect the prelim that I submitted for our jobs?

1 reply

Aug 28, 2018
It is definitely not a best practice to provide an unconditional waiver prior to payment being actually received. Since parties are supposed to be able to rely on unconditional lien waivers, what the lien waiver says can be more important that what has actually occurred. So, if an unconditional lien waiver says a claimant has been paid - that claimant has been paid (with respect to lien rights).

The situation in which a waiver is requested for a time period prior to the claimant's first furnishing, is odd. There is no effect on a claimant's lien rights to waive $0 paid, or waive lien rights from before the claimant worked (no lien rights exist that can be waived).

It may be sufficient to provide a letter or other document to the GC that states the first furnishing date of labor or materials as 7/26, and accordingly, no lien rights exist for anything prior to that date.

It also seems as if there is some confusion surrounding the preliminary notice. If the preliminary notice is given more than 20 days after the first furnishing date, it protects labor or materials furnished beginning 20 days prior to the date on which the notice was sent. If the preliminary notice is given within 20 days of first furnishing, it is effective to protect all of the labor/material furnished. However, sending the notice within 20 days of first furnishing doesn't extend any rights prior to the date of first furnishing.

While a request to waive rights that a party doesn't have is odd, and inconsequential, it is always a good idea to be wary of signing unconditional lien waivers prior to payment. It seems like there is some confusion here, and the GC is just understandably trying to limit lien exposure - they're just doing so, though, through a nonsensical method.
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