California’s “Unconditional Waiver and Release Upon Progress Payment”: A Detailed Guide

California’s “Unconditional Waiver and Release Upon Progress Payment”: A Detailed Guide

Lien waivers are documents that construction professionals sign when they want to renounce their lien rights against a property. Needless to say, such a serious decision must not be done haphazardly. Signing lien waivers requires some thorough decision-making, from choosing the right form to writing the correct information.

There’s very little room for error when signing lien waivers in California. Regulated lien waiver forms are provided by the state, and California statutes require contractors, subcontractors, and other construction stakeholders to specifically use these forms when issuing lien waivers.

While small formatting changes may be welcome, customizing the content of California’s statutory waiver forms will most likely invalidate the entire document and also cost the claimant a hefty fine. It is therefore in your best interest to use these statutory forms exactly as they are.

There are four types of California lien waivers but this post will specifically discuss the “Unconditional Waiver and Release Upon Progress Payment.” Before getting into the nitty-gritty on how to fill this document, you must first ensure that you are using the right waiver form that is best suited to your situation.

When do you use an Unconditional Waiver and Release Upon Progress Payment?

Unconditional waivers are used when payment has been exchanged, so you’re on the right track if you’ve already received payment for the work that you have so far rendered. Otherwise, consider looking into conditional waivers.

The crucial step in signing unconditional waivers is verifying that the payment has been cleared in the bank and is already at your disposal. Written at the very top of statutory unconditional waivers in California is a reminder that the document “is enforceable against you…even if you have not been paid.” If a credit card transaction is disputed and reversed after the waiver has been signed, the claimant will not get any payment and will also lose his or her lien rights. You must always wait until you are certain that you have the money in hand.

Once you have received the payment, ask yourself what kind of payment is it for. If it is part of a series of payments and you will continue to receive more compensation as the project progresses, then you’re dealing with a “progress payment.” Progress payments imply that you will be receiving more payments in the future as you keep on working on the same project. This is the opposite of “final payment” which means that your participation in the project is done and you won’t get paid any more amount.

In other words, you will use the “Unconditional Waiver and Release Upon Progress Payment” form if (1) you have already received the payment and (2) you are still expecting to receive more payments in the future as you continue to work on the project.

california unconditional waiver and release

A Detailed Guide on Filling Out Lien Waiver and Release Forms

  • Name of Claimant. This is the name of the party accepting the payment, which is typically the official name of the contracting or subcontracting company looking to issue and sign the waiver.
  • Keep in mind that the name of the company must be written correctly and in full, 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. Note that there are circumstances in which the “Name of Customer” does not necessarily issue the payment.
  • If, for example, the property owner pays the subcontractor directly, the “Name of 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 on 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.

unconditional waiver and release

  • 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 to 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.
  • Through Date. This item marks the “cut-off date” through which you are waiving your lien rights. You are essentially declaring that all the services you have provided until this “Through Date” have already been duly compensated, therefore your lien rights until that date may be relinquished.
  • This entry is arguably the most important item in this form and is also specific to “progress payment” waivers. Since the project is still ongoing and you are still performing your work, you must carefully decide on the date that accurately reflects the payment that you have so far received.
  • $. This is basically the dollar amount of the payment you have received. This should be straightforward and may be taken directly from the check, credit card transaction, or ACH record.
  • Exceptions. This is a pre-filled list of waiver exceptions that are legally mandated by California lien laws. “Retentions,” “contract rights,” and “extras for which the claimant has not yet been paid” are legally exempted from being waived. If you have other things in mind that you wish to exempt from being waived, you may add them to the list.
  • Claimant’s Signature. This is the signature of the agent that 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 when the claimant’s agent signs the waiver.
  • Remember that the form must be filled as accurately as possible for the waiver to work in your favor.

Can you send an unconditional lien waiver and release online?

Yes. Like other forms required in the lien process, releases and waivers must be filled out accurately to ensure that they’ll hold up.

Sending them online can help you save time not only sending the forms but also in finding accurate information and minimizing the chance to make a mistake on the form, rendering it invalid. Handle also helps with the whole lien process, including securing lien rights for all your contracts so you don’t miss form deadline. It’s beneficial for material suppliers, subcontractors and contractors to use it even way before it’s time to sign lien waivers and releases.

Best Practices When Signing an Unconditional Waiver and Release Upon Progress Payment form

1.  Sign an unconditional waiver only once payment has been received

Always keep in mind that any “unconditional” waiver is enforceable as soon as it is signed. The law will not reconsider the waiver’s effectivity even if you don’t receive your payment – you lose your lien rights the moment you place your signature on the form.

You must, therefore, sign this waiver only once you are absolutely certain that you have the payment on hand. Cheques that are yet to be cleared and credit card transactions that are yet to be approved DO NOT count as payment. These transactions may still get rejected, so make sure that they get approved before you give up your lien rights.

2.  Verify that you wrote the correct dates and dollar amounts

The amount that you list in this waiver will be for a partial or progress payment, which means that the lien amount must agree with the “Through Date.”

If you received payment only for the work that you’ve done until, say, August 30, 2019, make sure that the lien amount and the “Through Date” are listed accordingly. Otherwise, you might end up revoking your lien rights for future payments that you are yet to receive.   

3.  Do not modify the statutory lien waiver in any way

The state of California is very strict when it comes to lien waiver forms, so you must not in any way attempt to add or modify anything in the mandatory waiver document.

You are not supposed to add any other legal statements, and you must also not omit any of the required information. Double- and triple-check that you have written all the required details correctly, and make sure that no other unnecessary pieces of information are included.

Other Frequently Asked Questions

Do lien waivers need to be notarized in California?

No, lien waivers are not required to be notarized in California. Correctly filling out the state-provided waiver forms should be enough to ensure that the waiver is valid and enforceable by law.

Can I use my own customized lien waiver form?

No, not in California, one of the 12 states that require the use of statutory lien waiver forms. A California lien waiver is considered valid only when the form conforms to the state’s lien requirements. Using a customized lien waiver or modifying the contents of the statutory forms will likely result in a costly fine on top of the nullification of your waiver.

Is a lien waiver the same as a lien release?

No. A lien waiver is used before a mechanics lien is filed, while a lien release is used to cancel a mechanics lien that has already been submitted.

What happens if a check bounces after I sign an unconditional waiver in California?

Signing an unconditional waiver means you are relinquishing your lien rights unconditionally, even when the payment fails to get cleared in the bank. As long as the signed lien waiver follows the statutory requirements of California’s laws, the waiver is considered final and binding.

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