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Do I need to ensure that subcontractors are paid before releasing final payment to the GC?

California

As a public entity, do I need to ensure that the subs are paid by the GC?

2 replies

Dec 14, 2019
Not necessarily, but it is a good idea to require the GC to provide conditional waivers from subcontractors before the GC is paid for the subcontractor's work, and unconditional waivers thereafter. This will ensure that subcontractors are precluded from serving stop payment notice for the work subject to the waivers. It will also decrease the chance that the GC screws around with paying its subs. If payment issues are allowed to occur, and stop payment notice is served, there is a good chance that the public entity will be dragged into any resulting litigation. The best practice is to require waivers to manage this risk.
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Dec 14, 2019
Thank you for your response.  It is very helpful.  This is the final payment and no subs have issued a stop payment notice but four subs have called and said that they have not been paid.
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