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How do I receive payment from General Contractor?

I'm a Sub of a Sub Contractor that recently sent a general contractor a notice of Lien for non payment by the Sub Contractor and they are subsequently going to be issuing a check, however they are issuing the check with both the sub contractor and my company's name on the Conditional Waiver and Release. How does this work can I assume the check is just for my company or do I have to do something jointly with the other 1st sub contractor to receive payment?

1 reply

Nov 7, 2019

Sending a Notice of Intent to Lien can really be a strong tool to recover payment - and I'm glad you're getting paid for the work you've performed! With that being said, I'm not sure I completely understand your situation. I'll provide some information that I think will cover all bases below. But, for ultimate clarity, reaching out to the contractor who issued the check and asking how they'd like the documentation completed might help.

Cashing a joint check

It's relatively common for a general contractor to want to utilize joint checks - particularly where there's reason to believe that their direct sub might not make payment as required. When both a subcontractor and a sub-subcontractor appear on a joint check, then both parties will likely need to endorse the check in order to cash it. So, it may be helpful to reach out to your customer to get their endorsement on the joint check. For more background on joint checks, Levelset has written a lot on the topic: Joint Check Help.

California lien waiver with multiple parties on the waiver

If the lien waiver is designed for both a subcontractor and a sub-subcontractor to be signed, that'd be a little more interesting. If that's the case, presumably, both parties would need to sign the waiver for that waiver to be effective. However, note that California is a state with statutory lien waivers. And, it's impermissible for a contractor to request lien waivers that don't substantially conform to the statutory requirements. Since the inclusion of another party on the waiver seems like a pretty substantial change, a sub-subcontractor could likely submit a standard lien waiver in lieu of one that's requested which features a deviation from the statutory form. For more on California lien waivers: California Lien Waivers Guide and FAQs

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