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In California, can an owner require a general contractor to provide Unconditional Waivers from the GC's subcontractors?

CaliforniaLien Waivers

An owner is requiring us to provide unconditional waivers for all subcontractors in California. We have paid all subcontractors, and some subs are difficult to get a hold of and do not want to go through all the hassle of providing an unconditional waiver. Can the owner legally require us to provide unconditional lien waivers from our subcontractors in the State of California?

1 reply

Aug 21, 2018

I'm sorry to hear that the waiver process has become a headache. When it comes to requesting waivers, an owner is not really limited to what they may require. Thus, if an owner wants to require final unconditional waivers in addition to final conditional waivers, they may do so. Explaining to an owner that a conditional waiver is effectively the same as an unconditional waiver once payment has been made may be helpful to clear up the situation (for help, try this Guide to California lien waivers). Further, offering proof that each sub and supplier was paid in conjunction with those conditional waivers could also put an owner at ease. However, if an owner requires that unconditional waivers be provided in addition to conditional ones, that's their prerogative. However, that does not mean the owner may withhold payment from their contractor simply because the contractor has not provided secondary lien waivers to their liking. Thus, if the requirement for extra, unconditional waivers persists, a contractor may utilize (or threaten to utilize) tools for payment recovery, such as a Notice of Intent to Lien, a mechanics lien filing, or lawsuit to recover payments. However, an explanation of how California waiver rules work and a good faith effort to appease the owner's requests is often enough to calm everyone down and facilitate payment. Finally, if the waiver exchange process has become a burden, this article may help: 4 Tips on Requesting, Collecting, and Tracking Lien Waivers.

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