fbpx

Blog

How to Fill Out California’s Conditional Waiver and Release Upon Final Payment Form

How to Fill Out California’s Conditional Waiver and Release Upon Final Payment Form

September 29, 2019

Signing lien waivers in California requires some serious thought and consideration. Once you sign a lien waiver, you effectively renounce your right to file a mechanics lien against a property, so you must be 100% certain that this is actually what you want to do.

There are four types of lien waivers in California but this guide will focus on only one of them: the Conditional Waiver and Release Upon Final Payment lien waiver form.

This guide will show you detailed, step-by-step instructions on how to fill out a California Conditional Waiver and Release Upon Final Payment form and also discuss the best practices that you must remember when dealing with this specific type of lien waiver.

What is a California Conditional Waiver and Release Upon Final Payment form?

There are two key points that you must know to fully understand what a Conditional Waiver and Release Upon Final Payment is about.

First, it is a conditional waiver, which means that it can only be enforced under the condition that payment has been satisfied. Unlike an unconditional waiver, a conditional waiver guarantees that you still keep your lien rights until you have verified that your payment is on hand.

Second, it is a waiver that applies to either final or full payment. This means that this specific waiver is signed only when you are about to receive your last paycheque for a project. The implication is that your work on such a project has wrapped up and you will not be expecting any more payments following this last one.

California conditional waiver vs. unconditional waiver

When do you use a Conditional Waiver and Release Upon Final Payment form in California?

To understand whether a Conditional Waiver and Release Upon Final Payment form is the correct waiver for your situation, you must ask yourself two questions:

  • Are you still waiting for your payment to arrive?
  • Is the payment going to be the last payment that you are expecting from this project?

If your answer to both questions is “Yes,” then the Conditional Waiver and Release Upon Final Payment form is the correct waiver for you.

Another thing to keep in mind is that California lien waivers only waive your right to file a mechanics lien, a stop payment notice, and/or a payment bond. These rights may not be waived any other way than by signing the appropriate state-regulated lien waiver form in California.

If you are looking to waive your rights in making other claims (e.g. fraud claims, tort claims, etc.), signing a California lien waiver will not help you as this document does not cover any of them.

Conditional lien waivers

When do you exchange a California Conditional Waiver and Release Upon Final Payment form?

The timing for exchanging a lien waiver depends on the established business flow of a project, and it also depends on the terms that were agreed upon by the parties involved. Some property owners require construction parties to hand a signed lien waiver before paycheques are released, and some construction parties take the initiative and submit a signed conditional lien waiver together with the invoices.

If you are signing a Conditional Waiver and Release Upon Final Payment form, you may do either of those options mentioned above. You may sign a conditional lien waiver and receive the payment at the same time, or you may also sign a conditional lien waiver before you even get your paycheck.

Signing a conditional waiver keeps your lien rights intact until payment has been verified. If the paychecks bounce or the credit card payments get rejected, you can still file a mechanics lien to recover the compensation that you duly earned.

California conditional lien waiver

Detailed guide to filling out a California Conditional Waiver and Release Upon Final Payment form

One of the most important things to keep in mind is that California lien waivers are state-regulated. There is a specific form that you must use in order for your lien waiver to be considered valid, and using any other form will render your lien waiver unenforceable.

Once you have determined that the Conditional Waiver and Release Upon Final Payment is the appropriate waiver for your situation, you must then fill out your form.

  • Name of Claimant

This is the name of the party accepting the payment and looking to issue the waiver. If you’re working as an individual, write your full name. If you’re representing a business, write the full legally registered name of your business including the proper designations like Inc., DBA, etc. Misspelling the claimant’s name may invalidate the waiver so make sure that this item is filled accurately.

  • Name of Customer

This is the official name of the party that hired the claimant, which in most cases is the same party that makes the payment. In certain cases, the person signified by “Name of Customer” does not necessarily issue the payment (i.e. if the property owner pays a subcontractor directly, “Customer” will be the general contractor and not the owner).

  • Job Location

This is just the physical address where the project is located. The rules are fairly lenient with this item; you just have to make sure that you are identifying the correct project location. A supplier, for example, must write the address of the project site on which the materials are being used, not the location where the materials were initially shipped.

  • Owner

This is the name(s) of the property owner. If there are multiple owners, make sure that the names of all owners are included. If the work is being done for a tenant, also include the name of the tenant together with the owners’ names. The names of construction managers need not be included.

In the case of publicly funded projects, identify the name of the government agency that ordered the project. For public-private partnerships, identify the project developers.

  • Maker of the Check

This is the name of the party who is making the payment. The name should be written on the check if payment is being made by check.

If other methods are used (i.e. credit card, ACH, cash), you may use your best judgment and write the name of the party who is issuing the payment.

  • Amount of the Check

This is basically the dollar amount of the payment you will receive. This should be straightforward and may be taken directly from the check, credit card transaction, or ACH record.

  • Check Payable To

This is the name of the party who is receiving the payment. If the payment is issued through a joint check, write all the names of the recipients listed on the check.

If the payment is issued through cash, write the name of the party who will accept the payment.
Otherwise, use your best judgment and write the name of the party who will be accepting the payment.

  • Exceptions

There are two items under this list:

1. This document does not affect any of the following:
This should be any item that you do not want to be included in your waiver.

2. Disputed claims for extras in the amount of: $
This is the amount of any other item/claim that you do not want to waive.

  • Claimant’s Signature

This is the signature of the agent who is authorized to represent and act on behalf of the claimant.

  • Claimant’s Title

This is the job title of the claimant’s agent who is signing the waiver.

  • Date of Signature

This is the date on which the claimant’s agent signs the waiver.

Best practices when signing a Conditional Waiver and Release Upon Final Payment form

Keep these in mind when filling out and signing a Conditional Waiver and Release Upon Final Payment form in California.

1. You must be fully certain that this waiver is the correct waiver for your specific situation.

Always remember to ask yourself two important questions: Are you still waiting to get paid? Is the payment you are waiting for the final payment that you are expecting for this project?

If the answer is yes to both questions then you are looking at the correct waiver form.

However, keep in mind that as long as you have not yet verified that payment is on hand, you are still essentially “waiting” for your payment. All cheques and credit card transactions must be cleared in the bank before you can say that you have received your payment.

2. You must always use the statutory lien waiver forms in California.

California has specific forms for each specific lien waiver. Do not even try to modify the statements that are included in the waiver or add any other unnecessary legal items. For a Conditional Waiver and Release Upon Final Payment form, the following statement must be present at the top of your document:

CONDITIONAL WAIVER AND RELEASE ON FINAL PAYMENT NOTICE: THIS DOCUMENT WAIVES THE CLAIMANT’S LIEN, STOP PAYMENT NOTICE, AND PAYMENT BOND RIGHTS EFFECTIVE ON RECEIPT OF PAYMENT. A PERSON SHOULD NOT RELY ON THIS DOCUMENT UNLESS SATISFIED THAT THE CLAIMANT HAS RECEIVED PAYMENT.

Also, complete all the information required as accurately as possible. Do not add any more information than necessary, and do not miss any of the required details. Failing to complete the form properly will invalidate your lien waiver.

3. You must be certain that you are receiving your final payment for a project.

Since this waiver is a conditional waiver, you remain protected in case property owners fail to pay up. The more crucial detail, however, is whether the payment you will be receiving is the final payment or not.

Sign this waiver only when the amount you are listing on your form is the final amount that you are expecting to receive for a project. If there are outstanding amounts that you still expect to receive in the future, then you must reconsider whether a “final payment” waiver is the correct form for you.

Once you get paid for the amount that is listed on your Conditional Waiver and Release Upon Final Payment form, you fully extinguish your lien rights against that project. The understanding is that the property owners have fulfilled their obligation towards you, and you have agreed to not file a mechanics lien under any circumstances.

Other frequently asked questions

Here are the answers to some of the questions you might have about your Conditional Lien Waiver Upon Final Payment form.

Can you send a conditional lien waiver and release online?

Yes, you can. Sending a Conditional Lien Waiver Upon Final Payment form may be done via the Handle app. Handle ensures that the pieces of information you have entered are correct, including their spelling and even their factual accuracy.

Sending a conditional lien waiver through Handle is a good way to ensure that you meet all statutory requirements in California regarding lien waivers. California has very strict rules, and if you want professional lien experts to double- and triple-check your compliance to the rules — Handle is your best bet.

Handle can also help you with other lien-related concerns, from serving your pre-lien notices to filing an actual mechanics lien.

Do lien waivers need to be notarized in California?

No. Having your lien waivers notarized is not a requirement in California, therefore you do not have to take the extra and unnecessary step of doing so.

Can I use my own customized lien waiver form?

No, you must not use your own lien waiver form in California. A customized lien waiver form is not accepted in the state, so you should stick with the state-regulated forms and try to fill them out as accurately as possible using the tips and tricks presented in this guide.

 Further reading