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Final Payment

CaliforniaConstruction Accounting

I have a client that are not willing to pay us unless we reciprocally exchange check for unconditional release on final payment. We are located in California and I know that a Unconditional release will leave us without any rights if the check doesn't clear the bank. Are we allowed to add under Exceptions a note that states that this release is only valid upon funds positive deposit or something along these lines? thank you. Monica msafarik@icsinc.tv

4 replies

Apr 19, 2022
Your client is not being rational about the situation. A conditional release on final payment is the correct document to address this situation. An unconditional release can follow the conditional release once the check clears. You may consider presenting the client with the option of either having a lien recorded against the property, or the bill being paid in exchange for a conditional release.
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Apr 19, 2022

Thank you David. We did file a lien and then cancelled it because they made a big deal of it. are we able to file another lien?

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Apr 19, 2022
If you are within 90 days from the date of completion of the project, you can record a mechanics lien. If the Owner has properly recorded a Notice of Completion or Cessation, the time period is reduced to sixty days from completion if you are in direct contract with the owner.
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Apr 19, 2022
If you submit the conditional release with the final invoice that should be sufficient. The homeowner has the evidence of the conditional release and their bank's copy of the signed check if you cash the check. After the check has been cashed you should submit the unconditional release. If that is not sufficient for the homeowner, then you should discuss the matter directly with a construction law attorney.
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