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If a customer requests a conditional release, do I have to provide one? And if so, is there a timeframe in which it must be provided?

CaliforniaLien Waivers

A coworker argued that withholding a conditional release for a CA job would benefit our company if there are prior unpaid conditional releases. I stated that it would not benefit us to withhold any conditional releases, as they still show a balance owed, with prior release amounts listed as exceptions. It is still a collection tool showing balances owed to our company. I am curious if there is any guideline in regards to withholding a conditional release. I see no benefit to this.

1 reply

Jul 25, 2018

That's a great question - and you both make valid points. First, it's worth noting that a party is not required to provide a conditional release just because one is requested - and that means there is not a timeframe for which a conditional waiver must be submitted. To the arguments - conditional waivers do continue to protect balances owed, and do exclude some amounts. That's why using a conditional waiver is so much safer, and a claimant who's missing some portion of their payments can certainly use that protection to preserve their ability to recover down the line. But the other side of the argument has it's merit as well. While a conditional waiver will still afford protection, it might not put much urgency on the paying party - they know that as long as payment is eventually made, no lien will be filed. In other words - when a party continuously requests conditional waivers and fails to make complete payments, there's an aspect to this that seems like they're just kicking the problem a little further down the road to deal with it later. Depending on the amounts of missed payments, the relationships on the job, and other factors - these partial payments might be acceptable in the short term (as long as full payment comes later). But when partial payments are causing serious problems, withholding conditional waivers could be an option to get payments back on track. Again, this will certainly depend on a number of factors on a given job - not the least of which are the relationships on site and reputation. But, if it's time to play hardball, withholding conditional waivers could put pressure on a customer to catch up with payments - or it could least start the discussion. Ultimately, though, it is up to each party submitting waivers to come up with their own notice, lien, and waiver policies that best suite their business and job sites.

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