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Unconditional waiver and release forms and mechanics lien on property

Hello, I’m currently in contract with a contractor. A lot of payments have been made already and am requesting the contractor to provide a signed unconditional waiver and release form from each of the subcontractors and materials suppliers. Is there a deadline as to when they have to provide those? Can I stop payment until I receive those signed forms for work done by subcontractors and materials suppliers? Can contractor file a mechanic’s lien on the property if they don’t provide those forms that I need before writing the next installment check?

3 replies

Apr 25, 2020

Typically you exchange a check with a direct contractor for conditional (not unconditional) waivers/releases encompassed by that check. If you have already paid your general contractor for services/materials/equipment for which you have not received conditional releases, you could stop payment or simply demand them before agreeing to pay any further monies on the job. Yes, a GC can lien the property whether or not the GC has provided conditional or unconditional waivers/releases. Carlton & Alberola and/or Andrew Carlton have not been retained by the recipient of the above comment and, moreover, the above comment does not create an attorney-client relationship. The above is general commentary based on limited and insufficient information. If you wish to obtain legal advice, please contact Andrew Carlton at 949-954-6666 x101, or by email at andrew@cnalawfirm.com.

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Apr 27, 2020

You should demand that the contractor provide you an unconditional waiver and release on progress payment for all payments already made per Civil Code section 8134. For payments already made, you should also demand that the contractor provide you a unconditional waiver and release on progress payment for each subcontractor and material supplier that has sent you preliminary notice. You may also insist on releases from other subcontractors and/or material suppliers. But it is not as essential as they do not have lien rights if they did not send preliminary notice. You may refuse to make further payments until these waivers have been provided. Per Civil Code section 8122 a contract cannot require payment without receipt of these notices, if you choose to require it. Also insist that the contractor provide a conditional waiver and release on progress payment for future payments - and conditional waiver and release on final payment at the end of the project. The contractor might file a mechanic's lien. But it would be foolhardy to do so if the only issue is provision of these signed waivers. It will be cheaper for the contractor to provide the notices than to record a lien. And it is unlikely that the contractor would file an action to enforce such a lien. If the contractor did, its refusal to provide waivers would be a legitimate excuse to payment. If you require the assistance of an attorney I am available for a free 15-minute consultation. You can reach me at (805)377-6089 or via email at ryan@huntortmann.com.

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Apr 27, 2020

The requirement is reasonable. Problem is you should have included this in your contract with the general at the time you were contracting. If you do not get the release make the check jointly to the material house and or laborers if feasible.

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