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CALIFORNIA Mechanic's Lien Forms,
Construction Law and Construction Forms
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Pre-Lien and Mechanic's Lien Forms
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Includes:
1) A custom prepared form by an experrienced construction attorney after research of state law
(no generic or "one-size-fits-all" forms)
2) Proof of Service
3) Two pages of instructions and guidelines
4) (If applicable) a Cover Transmittal Letter to the Court/Recorder
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If your contract is with the owner
For general contractors, subcontractors, and suppliers dealing directly with the owner.
You are considered a "general" for purposes of the mechanic's lien law, regardless of your license status. |
If your contract is with the prime contractor
For general contractors, subcontractors, and suppliers dealing directly with a prime contractor.
You are considered a "sub/supplier" for purposes of the mechanic's lien law, regardless of your license status. |
| Lien Waivers and Releases (General, Sub, Supplier) |
| What are they and is there a difference between them? |
These forms can be confusing and hard to define, especially since they are called by so many different names. But there is a big difference between them and it is important to know the distinction. Here are some of the rules:
California Lien Waiver:
Defined as purposely giving up a known right to file/record a mechanic's lien in the future, based on receiving a progress draw. Often required by an owner or general to insure a lien-free job. You are giving up rights only for the amount of the payment and not future unpaid bills. It waives rights only through a certain date before payment is made. A mechanic's lien waiver will not prevent claims for contested change orders, retention, or breach of contract damages (for example-delay, impeded productivity, and other consequential damages). California uses the terms: "conditional lien waiver" and "unconditional lien waiver":
- California conditional lien waiver prevents the danger of giving up your rights after getting a check that bounces or is "payment stopped". This lien waiver is good only if the check clears.
- California unconditional lien waiver is a final lien waiver and means just that: fully and finally releasing rights with no later recourse or defense—sign these lien waiver forms only if you are assured you have been paid and are satisfied with the amount received.
In California, except for the first progress draw, all draws require you to sign two lien waivers — one for the current payment that is contingent on the check clearing and one for the previous payment, confirming it has already cleared. This prevents waiving your lien rights if a check is NSF or payment stopped (which occurred at times under the old law).
California Lien Release:
Defined as giving up your rights and striking from the record a mechanic's lien you have already filed. Applies to a final payment or full settlement which satisfies all obligations. You may not file or record again (unless it is a partial lien release).
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| Lien Releases and Lien Waivers (General, Sub, or Supplier) | | What are they and is there a difference between them? | Release of Lien? Waiver of Lien? These forms can be confusing and hard to define, especially since they are called by so many different names. But there is a big difference between a CONSTRUCTION LIEN RELEASE and a CONSTRUCTION LIEN WAIVER and it is important to know the distinction. Here are some of the rules:
Lien Waiver Forms: Defined as purposely giving up a known right to file/record a mechanic's lien in the future, based on receiving a progress draw or final payment. Often required by an owner or general to "close out" a project and insure a lien-free job. You are giving up the right to later file a lien only for the amount of the payment. The mechanics lien waivers on this site preserve important legal rights and will not prevent claims for contested change orders, retention, or breach of contract damages (for example — delay damages, impeded productivity, and other consequential damages). These waiver of lien forms are of two types: - Partial Lien Waiver Form. This is used for progress draws or a partial payment. It waives lien rights through a certain date (and not future unpaid bills) and only to the extent of the payment. Many general contractors and owners require these forms to be signed by the person receiving payment before a check is issued.
- Final Lien Waiver Form. This is used after final payment and means just that: fully and finally releases all future lien rights with no later recourse to file a mechanic's lien — sign this final waiver of lien only if you are assured you have been paid and are satisfied with the amount received.
How These Forms Work
Who Should Use These Forms?
- Owners: Request the prime contractor to sign.
- Prime Contractors: Request all subs to sign who are receiving your payment. There is no need to get waivers from sub-subs or suppliers of a sub because the sub signing the form represents that such persons have/will be paid.
- Subs: Request all lower tier subs you have a contract with and your material/equipment suppliers to sign.
What is Their Purpose? Lien waivers prevent: 1) paying twice for the same work, 2) making sure that once paid (except for contested items), someone will never be able to file a mechanic's lien for the work covered by the payment, and 3) insuring the payment is applied to a specific project.
Should I Sign Before Getting Paid? Yes. These forms are contingent and state the waiver takes effect only if the check clears.
When Should They be Sent Out? The common practice is to fax/send the wavier, get the original back signed, and then cut the check. Alternatively, you can exchange the check for the wavier in person.
Do I Need to Serve Anyone? No. There is no requirement of recording, filing, or serving the forms. Keep a copy and send/hand the original to the maker of the check.
Release of Lien: Defined as giving up your rights and striking from the record a mechanic's lien you have already filed. This lien release form applies to a final payment or full settlement which satisfies all obligations. You may not file or record a mechanic's lien again.
Beware of other forms
Do not sign a waiver form unless you understand the wording and agree to its terms. Many forms in circulation require you to waive rights you shouldn't have to give up. For example, you might be giving away: 1) lien rights even if a check bounces or is payment stopped, 2) contract rights (breach of contract, delay damages, lost profits, abandonment, liquidated damages, extended overhead, and similar rights), 3) disputed change orders, or 4) requiring you to "indemnify" or "hold harmless" and pay judgments, court costs, and attorney's fees of another party. The forms on this site do not waive these important rights and provide a fair balance of the interests of a general, sub, and owner. | | | |
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Change Orders
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