I have a contract with a general contractor to due some tenant improvements. The GC is using subcontractors. I have asked for a copy off all conditional lien releases (from the subs) and proof of payment to the subs, before I pay my invoice to the GC. I feel that this is the correct process and best protects me for a GC not paying a sub. Is this what you would recommend? Thanks - Paul
Good morning! You generally have it right. The most important subcontractors and suppliers to deal with are those that you have received preliminary notices from. However, even subcontractors and suppliers that did not properly serve a preliminary notice, may be protected under California law which is liberally construed to protect these claimants so it is important to secure proof of payment from all subcontractors and suppliers on your project. Typically, this is done through securing proper signed waivers and releases under Civil Code section 8132 through 8138 from not only your GC, but from each subcontractor and supplier on the project as appropriate. Also, to the extent you can identify unpaid subcontractors, using joint checks can be an important way to manage your risk. You should consult an experienced construction lawyer to make sure that all your bases are covered as there are other aspects to think about as well!