I need to include a waiver with my retention billing. Do I use a cond'l final or cond'l progress? If final is correct answer, is the exception box on the cond'l final where I should indicate prior billing amount that which customer has not paid yet?
Mar 21, 2019
These are great questions! While I'm not able to provide advice on how to proceed or how to fill out forms, I can provide some information that should be helpful for making your own determinations.
When retainage is the only outstanding payment on a job, typically, a party seeking to obtain that retainage will utilize a final waiver. This makes sense because, when seeking out retention payments, those payments will typically be the only payment outstanding. When progress or partial lien waivers are used, that indicates that additional payments are expected. As hinted at in your question above, when payment is outstanding, it's generally most appropriate to utilize conditional lien waivers because those waivers will only be effective upon the receipt of payment. As mentioned in the above question, California conditional waivers (both final waivers and conditional waivers) provide a section of the waiver where the party submitting that waiver can list out "Exceptions" - and amounts listed in Exceptions will not be affected by the lien waiver document. So, a claimant can except some amounts from the waiver regardless of whether the waiver is a final or a progress/partial waiver. Of course, note that on the Final Conditional Waiver (set out under § 8136 of the California Civil Code), the label under exceptions reads "This document does not affect any of the following: Disputed claims for extras in the amount of: $ _____". Under the Conditional Waiver for Progress Payments (set out by § 8132 of the California Civil Code), the exceptions section is much more extensive. The waiver excludes (1) retentions, (2) unpaid extras, (3) certain specified unpaid progress payments, (4) certain contract rights. So, by reading the exceptions sections on these lien waivers, a claimant may be able to determine which waiver would be most appropriate for their situation. If only extras will remain unpaid after the waiver is exchanged for payment, then a final conditional waiver may be appropriate. Though, if other amounts beyond extras will remain unpaid, then a progress/partial conditional waiver might be more appropriate. Finally, here are some other resources that should be valuable: (1) Guide to California Lien Waivers; and (2) California Lien Waiver FAQs. I hope this was helpful! Feel free to come back to the Construction Legal Center with any other questions you may have.