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How can a City require an Unconditional Release on Final Payment prior to paying retention?

Hello, Can an owner (city) in California require an Unconditional Release on Final Payment prior to paying us (general contractor) our retention? Or is this illegal as they are "forcing" us to waive our rights prior to getting paid? Your prompt response would be greatly appreciated. Thank you

1 reply

Jan 30, 2020

They can require an Unconditional Release on Final Payment. Simply add the unpaid retention in the "exceptions" portion of the unconditional waiver. And keep in mind that, absent a good faith dispute, the city must pay you retention within 60 days of project completion Public Contract Code §7107 provides that any public entity must pay the original contractor retention within 60 days after the date of completion. If they fail to do so (absent or good faith dispute) you can go after them for 2% per month on the balance owed in lieu of interest. In the event a lawsuit is filed, the prevailing party is entitled to attorneys’ fees and costs.

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