Whether you’re a general contractor (GC), subcontractor, or property owner, understanding California lien waivers is crucial. These essential documents function as receipts acknowledging payment up to a specific amount, thereby waiving the party’s right to file a lien against the property for that amount. While the concept is straightforward, the practical application of lien waivers can be complex.
Several types of lien waivers exist, each requiring submission at specific times during a project. (For a deeper dive into lien waiver basics, refer to The Ultimate Guide to Construction Lien Waivers for Subcontractors.) Moreover, lien waiver requirements vary by state, with each jurisdiction setting its own rules regarding valid forms, contents, and enforcement.
Understanding these nuanced requirements is important for subcontractors to maintain compliance, prevent payment disputes, and protect their financial interests. So grab your hard hat, and let’s dive into the world of California lien waivers!
(For more general information on lien waivers, check out this on-demand webinar: End the Whack-a-Mole: Lien Waiver Best Practice for Subs.)
In California, it pays to familiarize yourself with the state’s complex lien waiver laws. Not only are lien waivers highly regulated here, but choosing not to follow guidelines could put you and your team in hot water. California is one of only 12 states that mandates its lien waivers with specific forms. These include:
- conditional waiver and release on progress payment,
- unconditional waiver and release on progress payment,
- conditional waiver and release on final payment, and
- unconditional waiver and release on final payment.
While the corresponding contract can (and should) include any project-specific requirements, it’s important to match lien waivers to California’s outlined forms. If you don’t, you could wind up with an unenforceable lien waiver or even fines. Carefully review the lien waiver and contract to ensure you’re following the rules.
When handling California lien waivers, keep these things in mind:
- Conditional lien waivers are binding once there is evidence of payment, shown only by endorsement on a single or joint payee check or written acknowledgment of payment by the waiving party. Unconditional lien waivers in California are binding once signed, even without payment.
- California law prohibits contractual provisions that waive lien rights, otherwise known as advance lien waivers. California lien waivers should only be exchanged after work has been completed.
California lien waivers are governed by specific statutory forms. Any that do not follow the format “substantially” may be void and incur a fine.
California accepts both conditional and unconditional lien waivers for progress and final payments.
California accepts both conditional and unconditional lien waivers for progress and final payments.
To be considered valid, California lien waivers must:
- be in writing
- follow the outlined format and provide the required content as specified within state statutes
- be signed by the waiving party
- clearly state the amount being waived and the property to which they apply
California law strictly prohibits waiving lien rights in the contract. Parties who do so can face penalties via fines.
As long as one of the four templated lien waiver forms is used and guidelines are followed, it is legal to waive lien rights prior to payment in California.
Completing Lien Waivers in Siteline
- Create, monitor, and track all your lien waivers in one place.
- Automatically fill out and send the right waiver at the right time.
- Request lower-tier lien waivers from all your sub-tier contractors, vendors, and suppliers—individually or in bulk.
- Securely collect e-signatures, with automatic reminders for any unsigned waivers.
- Package and submit signed waivers to your GCs directly within Siteline.
Yes, California provides four templates to use for lien waiver subsets. If parties do not use one of these forms and/or the language does not align “substantially,” it can be rendered void. To make matters worse, parties who choose their own form are subject to fines ranging anywhere from $100 to $1,000 per California Business and Professions Code 7034.
You definitely don’t want this to happen. Decide on the type of lien waiver you’re going to use, then fill out only those contents. Include any project-specific information that cannot be represented within the form in the corresponding contract instead.
California lien waivers are governed by specific statutory requirements. Each must be met for the lien waiver to be valid and enforceable:
- Lien waivers must follow the format and content of the state’s lien waiver forms (see FAQ #6 below for a quick link to each).
- Lien waivers must contain standardized elements such as the project name, job number, pay amount, and more.
California statutes make clear that lien waivers are not valid when lien rights are waived in the contract or before work has been completed (advance lien waivers). Parties must follow guidelines outlined in state statutes based on the lien waiver subset(s) they choose:
- Conditional waiver on progress payment: Use this type when you want to waive your lien rights for a specific portion of the project once the general contractor pays the noted amount. Exchange the waiver when submitting a pay app for a progress payment.
- Unconditional waiver on project payment: Ideally, you want to use this waiver after you’ve been paid; not doing so can result in payment delays or other issues. Once you receive payment, exchange this form to waive your lien rights on a specific portion of the project.
- Conditional waiver on final payment: This form waives your right to file a lien for the entire project, and it’s only enacted once the general contractor pays the remaining balance in full. You’ll submit this waiver with the final pay app.
- Unconditional waiver on final payment: This waiver should only be exchanged at the end of the project, and will waive all lien rights for the job. File this waiver after you’ve received your final payment, including retention and fees.
Per a notice in state statutes, unconditional waivers should only be signed once payment is received; however, parties can still technically exchange them after work has been completed but before payment has been granted. (We don’t recommend this, as it’s a pretty risky practice for subcontractors.)
If you need more help determining which lien waivers to use and when, check out this comprehensive guide.
Project-specific lien waiver provisions can be added to the overarching job contract, unless they attempt to waive lien rights. These provisions are prohibited by California law. The decision can also lead to hefty fines ranging from $100 to $1,000.
(Remember, lien waiver provisions should never be added to the actual lien waiver in the state of California.)
In California, it’s extra important to use the outlined lien waiver forms mandated by civil codes. If you supply your own or adjust the language, the lien waiver could be deemed void.
Using California’s mandated lien waiver forms is also a great choice in case of any disputes; since the language is clearly outlined and interpreted by the state, this can offer parties like subs extra protection in case anything unexpected happens.
If, after reviewing the lien waiver and corresponding contract, the dispute cannot be resolved directly, we recommend consulting with a construction law attorney who is familiar with California lien laws.
Since specific statutes and templated forms govern California lien waivers, it’s important to know exactly what you must include. By doing so, you’ll protect your lien rights. Review the following resources below to get the full picture:
- California Civil Code Division 4, Part 6, Title 1, Chapter 3: Waiver and Release
- California Civil Code Division 4, Part 6, Title 1, Chapter 3: Waiver and Release, 8132 (for conditional waivers for progress payments)
- California Civil Code Division 4, Part 6, Title 1, Chapter 3: Waiver and Release, 8134 (for unconditional waivers for progress payments)
- California Civil Code Division 4, Part 6, Title 1, Chapter 3: Waiver and Release, 8136 (for conditional waivers for final payments)
- California Civil Code Division 4, Part 6, Title 1, Chapter 3: Waiver and Release, 8138 (for unconditional waivers for final payments)
- California Business and Professions Code, Division 3, Chapter 9, Article 2, 7034
- California Contractors State License Board (CSLB)
- CSLB Information on Conditional and Unconditional Waiver and Release Forms
- California Lawyers Association (CLA) Labor and Employment Law Section
Automate the process with Siteline. Contractors use our lien waiver tool to digitize all of their lien waiver forms (primary and vendor), send waiver requests to lower-tier contractors and vendors, collect e-signatures, and submit completed waivers to their clients—without ever leaving the system. Siteline even provides centralized tracking to help contractors monitor vendor waiver statuses to see who’s received the form, who’s opened it, and who has (or hasn’t) signed. This means contractors can collect waivers faster while eliminating payment delays caused by compliance holds.
Disclaimer: The information provided on this page is for general informational purposes only and does not constitute legal advice. We recommend you consult a qualified attorney for advice specific to your situation.