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Our customer is asking us to sign a Conditional Lien Release, are we undermining any of our rights if we sign?

CaliforniaConstruction ContractLien Waivers

We send all of our clients a Preliminary Notice at the start of every project and an Unconditional Waiver and Release Upon Final Payment after final payment is received. One customer has actually asked us to sign a Conditional Waiver and Release Form Final Payment after we requested payment on the balance due. We are concerned signing this will undermine any of our rights since this is not our typical procedure. Please advise.

2 replies

Oct 18, 2021

The Conditional Waiver and Release Upon Final Payment acts just like the Unconditional Waiver and Release Upon Final Payment once payment is received. Thus, you need to be sure that you have accounted for your entire claim amount in the Conditional Waiver and Release Upon Final Payment and if there are any remaining claims, they should be cleary stated and reserved in the EXCEPTIONS section of the Form.

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Oct 20, 2021

No, you shouldn’t be waiving any rights if you fill out the form correctly. I’m assuming this is for a progress payment and not a final payment.

 

 

 

1. Make sure the amount you insert is the amount of the current check you’re expecting. (Don’t list the total contract price or what you’ve already received.)

 

 

 

2. On the “Through Date” line under the “Identifying Information” paragraph, be sure to put the date that the work was done that you’re getting paid for NOT the current date. In other words, if you’re being paid in October for work you did in August, then be sure to put the August date here. You don’t want to waive your right to recover for later work.

 

 

 

3. If you are still owed money for an invoice that you gave a Conditional Lien Release for in the past, be sure you list it in (3) of the “Exceptions” section. State the date of the previous waiver and release and the amount of your unpaid progress payment.

 

 

 

Once you’ve received the payment, you will have waived your lien rights only as to that payment since you already received it. If you don’t receive it, you haven’t given up any of your rights to recover this payment.

 

 

 

I’m happy to answer any questions you have about this.

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