Lien waivers are often exchanged during construction projects, typically as a requirement imposed by owners before they release payments. In states like California, using lien waivers is strictly regulated.
This means that all parties have to use the lien waiver templates specified in the California Civil Code. Failing to use the relevant statutory lien waiver template will render a waiver unenforceable. While this sounds like you’re expected to do extra work, it actually makes your life easier. This way, you won’t have to worry about what statements to include in your California lien waiver.
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This guide will discuss the California Unconditional Waiver and Release on Progress Payment, one of the four lien waivers in the state. It is described in California Civil Code Section 8134.
- When do you use a California Unconditional Waiver and Release on Progress Payment?
- How to fill out a California Unconditional Waiver and Release on Progress Payment
- Best practices before signing a California Unconditional Waiver and Release on Progress Payment
When do you use a California Unconditional Waiver and Release on Progress Payment?
These are the questions that you must ask yourself to know if the California Unconditional Waiver on Progress Payment is the correct lien waiver for you:
1. Have you received your payment yet?
Use this type of California lien waiver only if your answer is yes. Otherwise, you should consider signing a different type of lien waiver. Since this is an unconditional lien waiver, you will lose your lien rights the moment you sign the form. You don’t want to relinquish your lien rights unless you have gotten paid, so use this lien waiver only if you have your payment on hand.
2. Is your work on the project still in progress?
If the answer is yes, then this is a good lien waiver to sign. A work in progress means that your participation in the project will continue even after receiving the payment for which you are signing this waiver. If your work on a project is already complete and you are no longer expecting more payments in the future, consider signing a final payment waiver instead.
Note that having the payment on hand before signing a California unconditional progress payment lien waiver is very important. A cheque or a credit card transaction does not count as payment unless it has been cleared by the bank. Keep in mind that these types of payments may be rejected in the bank.
How to fill out a California Unconditional Waiver and Release on Progress Payment
Make sure that your California Unconditional Waiver and Release on Progress Payment is substantially the same as the template specified in Civil Code Section 8134.
When using the template above, be sure that the Notice Statement is written with the same font size as the largest type in the form. The law requires it to be as large as the rest of the largest text on the form.
Filling out the rest of the form is as simple as providing the required information.
When you have the correct lien waiver form, all you need to do is fill in the blanks with the following information:
1. Name of Claimant
This is your name. If you are signing this lien waiver on behalf of your business, be sure to include your full official business name.
2. Name of Customer
This is the name of the hiring party or the party who hired you for the project.
3. Job Location
This is the property address, which can be as simple as a street address.
This is the name of the property owner. You may write multiple names if there are multiple property owners.
5. Through Date
This is the date until which your lien waiver will be effective. All your services up to this date will no longer be lienable once you sign this lien waiver. Make sure that this date matches the payment that you have received for signing this waiver.
This is the amount of payment that you received in exchange for this lien waiver. Since this is a progress payment waiver, this amount should not be your final payment yet. Also, note that this amount must correspond to the work that you have furnished up until the Through Date.
7. Claimant’s signature and title
This is your signature and job title.
8. Date of signature
This is the date when you sign the lien waiver.
The California lien waiver template also has a pre-filled list of exceptions, which include retentions, contract rights, and extra unpaid payments. You may add more exceptions to this list if you wish.
Note that the California lien waivers do not have to be notarized.
Best practices before signing a California Unconditional Waiver and Release on Progress Payment
1. Verify that you are using the statutory lien waiver form
A lien waiver may be prepared by you, or it may be a form handed to you by your client or another higher-tier party. In either case, you have to make sure that the California lien waiver you are signing is the exact same as the template specified in the California Civil Code. The template for the Unconditional Waiver and Release on Progress Payment may be found in Section 8134.
2. Ensure that the details written on your lien waiver are correct and accurate
Avoid typographical errors at all cost, and be as diligent as possible when filling out a California lien waiver. The business names must be written in full (including suffixes such as Ltd. and Inc.) and the payment amount and Through Date must be accurate. All your lien rights up until the Through Date will be revoked, so be extra careful when determining the correct Through Date for your situation.
3. Make sure that you have your payment on hand
This is an unconditional lien waiver, which means that you will automatically lose your right to file a mechanics lien for the specified time period as soon as you sign the document. If a check bounces or a credit card transaction gets rejected, your lien rights will not be recovered. You have to be certain that your payment is on hand before you sign this lien waiver.
Otherwise, consider signing a California Conditional Waiver and Release on Progress Payment.