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Can Customer Require Lien Waivers From My Subcontractors?

 
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Old 03-22-2011, 01:27 AM   #1
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Can Customer Require Lien Waivers From My Subcontractors?


I am in CA.

My customer will not pay until he gets lien waivers signed by all of my subcontractors. Can he do this? Is this legal? Can I go ahead and slap a mechanic lien on him?
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Old 03-22-2011, 02:25 AM   #2
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Re: Can Customer Require Lien Waivers From My Subcontractors?


yes he can, cause what happens if you dont pay your subs? those subs will file liens against the customer.

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Old 03-22-2011, 06:25 AM   #3
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Re: Can Customer Require Lien Waivers From My Subcontractors?


I've signed several lien waivers for HO's "AFTER" I have been paid in full.
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Old 03-22-2011, 06:26 AM   #4
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Re: Can Customer Require Lien Waivers From My Subcontractors?


That's a standard practice----go to any office supply store and get the forms.

Talk to your attorney (if you have one) and get the details.
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Old 03-22-2011, 07:04 AM   #5
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Re: Can Customer Require Lien Waivers From My Subcontractors?


If you were working legally, wouldn't you already know this from your contractor's exam questions?
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Old 03-22-2011, 07:16 AM   #6
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Re: Can Customer Require Lien Waivers From My Subcontractors?


Quote:
Originally Posted by HiHo View Post
I am in CA.

My customer will not pay until he gets lien waivers signed by all of my subcontractors. Can he do this? Is this legal? Can I go ahead and slap a mechanic lien on him?
Why would you want to lien him? You've paid the subs right? Its just a little paperwork. If you're counting on payin subs out of the last payment its either too much left at completion or you're too close on the job. What pct do they still owe?
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Old 03-22-2011, 08:40 AM   #7
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Re: Can Customer Require Lien Waivers From My Subcontractors?


Most times any more specially if there is bank money, it is standard for me to sign a lien waiver before getting paid as a sub. In a world any more where a hand shake or ones word does not mean a lot it is just good business to do the lien waivers.
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Old 03-22-2011, 11:32 AM   #8
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Re: Can Customer Require Lien Waivers From My Subcontractors?


They owe about 35%. Customer is asking for lien waivers for all items that his 65% has already covered before he makes the final payment.
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Old 03-22-2011, 11:46 AM   #9
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Re: Can Customer Require Lien Waivers From My Subcontractors?


My main concern is that one of my subs did a terrible job in which I had to hire another sub to tear out his work and do it all over again. I did not pay that first sub. Customer is asking me to make sure that the first sub signs a lien waiver. Any suggestions?
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Old 03-22-2011, 12:38 PM   #10
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Re: Can Customer Require Lien Waivers From My Subcontractors?


Did the subs file Notice to Owner's? Here in FL the subs have 45 days from the last day of work on site to file NTO's. Without them, a subs lien is useless (legally)
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Old 03-22-2011, 12:43 PM   #11
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Re: Can Customer Require Lien Waivers From My Subcontractors?


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Originally Posted by ziemer View Post
Did the subs file Notice to Owner's? Here in FL the subs have 45 days from the last day of work on site to file NTO's. Without them, a subs lien is useless (legally)
I have no idea but I wouldn't doubt that the first sub will eventually file a lien since he was never paid. Plus our written contract with the customer is not very concrete or detailed. Not sure how the first sub can prove to a judge when work started or stopped.
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Old 03-22-2011, 12:49 PM   #12
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Re: Can Customer Require Lien Waivers From My Subcontractors?


It should be relatively easy to find out since it would be filed based on your Notice of Commencement.
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Old 03-22-2011, 01:07 PM   #13
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Re: Can Customer Require Lien Waivers From My Subcontractors?


Is there a form that I can sign and fill out that lists every subcontractor/laborer that I used for this project? This customer is very paranoid that one of the many workers that did work in his house will file a lien against him. Is there a form that swears that the names on the list are the only ones who have the right to file a lien? Customer wants to make sure that everyone who has the right to file a lien signs the lien waiver.
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Old 03-22-2011, 08:03 PM   #14
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Re: Can Customer Require Lien Waivers From My Subcontractors?


Sorry if this sounds harsh, but you should now about this if you are a licensed GC in CA. All of your subs have 20 days from the date of the start of work to post a preliminary notice. If one did not, they lose all right to file a lien. If your sub was not paid, he may decide to file a breach of contract suit against you, or file a lien on the HO. cslb.ca.gov has information on liens. Also, there are two different waivers, conditional and unconditional. You might want to read up on this subject, and you might want to hire a lawyer (yikes) if there is an ongoing dispute between you and a sub.
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Old 03-22-2011, 08:18 PM   #15
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Re: Can Customer Require Lien Waivers From My Subcontractors?


Quote:
Originally Posted by Muddauber View Post
I've signed several lien waivers for HO's "AFTER" I have been paid in full.
I don't understand the "pay first, and I'll sign" approach. You might like it, but the customer takes all the risk if you take the money, then refuse to sign the contract. Not saying you'd do that, but you have the fear that customer will default. The customer have the fear that you will take the money, default your payments to subs and get his tail chased by the subs.

The contract should just be worded from the beginning that customer shall be released from any claims once he pays the GC in full amount. Its win-win.

The contractors still have the ability to file a lien if the payment isn't made. The customer has assurance that they've been released from further liability against lien claims once they cut the GC the check for an amount agreed upon in contract.

Last edited by Electric_Light; 03-22-2011 at 08:21 PM.
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Old 03-22-2011, 08:42 PM   #16
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Re: Can Customer Require Lien Waivers From My Subcontractors?


Yeah, here in California it's called a "Conditional Waiver and Release". Basically, the Waiver goes into effect if and when the check clears.
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Old 03-23-2011, 07:43 AM   #17
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Re: Can Customer Require Lien Waivers From My Subcontractors?


Quote:
Originally Posted by Electric_Light View Post
I don't understand the "pay first, and I'll sign" approach. You might like it, but the customer takes all the risk if you take the money, then refuse to sign the contract. Not saying you'd do that, but you have the fear that customer will default. The customer have the fear that you will take the money, default your payments to subs and get his tail chased by the subs.

The contract should just be worded from the beginning that customer shall be released from any claims once he pays the GC in full amount. Its win-win.

The contractors still have the ability to file a lien if the payment isn't made. The customer has assurance that they've been released from further liability against lien claims once they cut the GC the check for an amount agreed upon in contract.
Quote:
Originally Posted by A.T.C. View Post
Yeah, here in California it's called a "Conditional Waiver and Release". Basically, the Waiver goes into effect if and when the check clears.

Yup. Same here.

Conditional lien release is what is signed by all my clients.
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Old 03-23-2011, 11:42 AM   #18
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Re: Can Customer Require Lien Waivers From My Subcontractors?


So do I just give the customer a general release form from my company or do I have to provide the names of all my subs and have each sub sign a separate waiver and give those to my customer?
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Old 03-23-2011, 12:30 PM   #19
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Re: Can Customer Require Lien Waivers From My Subcontractors?


Quote:
Originally Posted by HiHo View Post
do I have to provide the names of all my subs and have each sub sign a separate waiver and give those to my customer?
Yes
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Old 03-23-2011, 12:45 PM   #20
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Re: Can Customer Require Lien Waivers From My Subcontractors?


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Originally Posted by Anti-wingnut View Post
Yes
Is this required by law? I may have trouble either tracking down some of these subs or getting the sub that I didn't pay to sign a waiver. I can understand why the customer would be worried that the first sub will put a lien on his house. I know the sub only has 20 days to file a lien but we do not have any paperwork that proves when work actually started or stopped. He can theoretically file a lien 100 days after, correct?

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