California Lien Waivers Overview

Whenever payment exchanges hands in the construction industry, parties typically exchange lien waivers to document the receipt of funds and the waiver of any mechanics lien rights. Lien waivers can be regulated heavily, or not regulated at all. Nevertheless, they are almost always a source of confusion with lots of room for error. Below are some frequently asked questions about the lien waiver laws and requirements in California.

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California

Lien Waiver Forms
Required Forms

You must use California's statutory forms and cannot use your own lien waiver forms.

California

Notarization Requirement
No Notarization

Lien waivers in California do not need to be notarized, and should not be notarized.

California

Lien Waiver Forms
Required Forms

You must use California's statutory forms and cannot use your own lien waiver forms.

California

Notarization Requirement
No Notarization

Lien waivers in California do not need to be notarized, and should not be notarized.

California

Waive Lien Rights in Contract?
No - Not Allowed

Parties are not allowed to waive lien rights in their contract before work begins, and any such waiver is not valid.

California

Unconditional Without Payment?
Allowed - If On Form

If someone signs an "unconditional" lien waiver when payment has not actually been received, it will be valid and will prohibit a lien filing so long as the correct form was used.

California Lien Waivers FAQs

CALIFORNIA LIEN WAIVER FAQs

Does California require a specific statutory lien waiver form?

Yes, California requires statutory forms for lien waivers to be considered valid and enforceable.  This means that you MUST use a specific form in California. California is one of 12 states that requires a specific lien waiver form be used by contractors and suppliers on projects in the state. Here are the 4 California statutory lien waiver forms:

  1. Unconditional Final (payment in hand)
  2. Unconditional Partial (payment in hand)
  3. Conditional Final (payment not in hand)
  4. Conditional Partial (payment not in hand)
Must a California lien waiver be notarized?

No, it is not required that California lien waivers be notarized even though it is common for contractors to ask that the document be notarized. As discussed in “Do Lien Waivers Need To Be Notarized?,” only 3 states require notarization on waivers. In fact, it is possible that notarizing your California lien waiver could invalidate it, since it would change the form, and California requires certain lien waiver forms be used.  Accordingly, it is the best practice to NOT notarize your California waiver.

What are the requirements for an California lien waiver? What makes a lien waiver binding?

The lien waiver must comply with the statutory provisions in order to be valid. Any waiver that does not comply with the statutory provisions, despite written or oral consent, will be void.  That being said, specific consent is still required in order to validate a lien waiver. Here are the 4 California statutory lien waiver forms:

  1. Unconditional Final (payment in hand)
  2. Unconditional Partial (payment in hand)
  3. Conditional Final (payment not in hand)
  4. Conditional Partial (payment not in hand)
Are Unconditional Lien Waivers Prohibited in California?

No, unconditional lien waivers are allowed in California as long as the unconditional lien waiver complies with the statutory form. It is specifically allowed by California Code §8126 that an unconditional lien waiver — in the form prescribed by the statute — can be valid and used to prevent a lien filing, even if the party who signed it did not receive payment. To read more about the types of waiver available in California, check out our article “California Lien Waiver Forms & Guide (Conditional & Unconditional)“.

Is there a specific statutory prohibition on lien waivers in advance of payments, furnishing of work, or furnishing of materials in California ?

California has clear rules about this, but it is possible to sign a valid unconditional lien waiver even if you have not received payment. Unconditional lien waivers are valid even if payment is not received, but only if the lien waiver form strictly follows the form provided by the California laws, which contains bold warning language to the lien claimant. The required language, provided by California Code §8134, is:

“THIS DOCUMENT WAIVES AND RELEASES LIEN, STOP PAYMENT NOTICE, AND PAYMENT BOND RIGHTS UNCONDITIONALLY AND STATES THAT YOU HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. THIS DOCUMENT IS ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID. IF YOU HAVE NOT BEEN PAID, USE A CONDITIONAL WAIVER AND RELEASE FORM.”

What happens if a payment check bounces after I sign a California lien waiver?

It depends the type of lien waiver that you signed.  If you sign a “conditional” lien waiver in exchange for a check, and the check then bounces, it is highly likely that the lien waiver will be invalidated. However, if you signed an unconditional waiver that conforms to the for requirements of California’s statues, then the waiver will likely be final and binding regardless of whether payment was actually received.  This is why it’s important for unpaid parties to sign only conditional lien waivers if they have not actually received payment.  Read more:  What happens if payment bounces after an Unconditional California Lien Waiver already signed?