Understanding lien waivers and why they matter
A lien waiver is your proof that you paid. Without one, a subcontractor or supplier could file a lien on your home even if you already paid your contractor.
What is a lien waiver and why do I need one?
A lien waiver is a document where someone who has a right to file a mechanic's lien on your property agrees to give up that right in exchange for payment. Here's why it matters: when you pay your general contractor, they're supposed to pay their subcontractors and material suppliers. If they don't, those unpaid subs and suppliers can file a lien on YOUR house - even though you already paid the GC. A lien waiver from the GC (and ideally from major subs) protects you by proving payment was received. Always get a conditional lien waiver before making a payment, and an unconditional waiver after it clears.
Should I get a lien waiver for every payment?
Yes, absolutely. Request a conditional lien waiver with each progress payment, and an unconditional waiver once the payment clears. A conditional waiver says: 'I waive my lien rights for this payment, conditional on the check clearing.' An unconditional waiver says: 'Payment has been received and I waive all lien rights for this amount.' For the final payment, get an unconditional final lien waiver from the GC and all major subcontractors. This is your proof that everyone has been paid.
What happens if a subcontractor files a lien on my house?
If a subcontractor or supplier files a mechanic's lien on your property, it means they claim they weren't paid for work they did on your house. This can happen even if you paid your general contractor in full - the GC may not have paid the sub. The lien clouds your title and must be resolved before you can sell or refinance. Your options: (1) Pay the lien amount and pursue your GC for reimbursement. (2) File a bond to release the lien. (3) Contest the lien in court if you believe it's invalid. (4) File a CSLB complaint against the GC. This is exactly why lien waivers with every payment are so important - they're your best defense.
Related guides in Money & Payments
California law (B&P Code 7159.5) limits deposits to $1,000 or 10% of the contract, whichever is less. Any contractor asking for more is breaking the law.
Never pay ahead of work completed. Tie payments to milestones: deposit, demo complete, rough inspection, substantial completion, final walkthrough.
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