I recently hired a contractor in California for a home project, and they provided me with an invoice for a progress payment. I'm aware that they have a couple of subcontractors and a supplier, so I'm trying to figure out how a lien waiver works in this situation. I'm leaning towards using a conditional lien waiver, but I'm really confused about the entire process—like who signs what and who the claimant is. Since this is a progress payment and not the final one, could someone explain how this works for homeowners? I've watched a ton of YouTube videos but still find it pretty confusing. It seems like from the CSLB guidelines, the lien waiver gets signed only after the subs and suppliers are paid, but if I haven't paid the contractor yet, I assume he hasn't paid them either. So, I'm just looking for clarity on the logistics and timelines here!
1 Answer
The claimant for a lien waiver typically includes the subcontractors and suppliers at the end of the payment chain. A lot of contractors may hesitate to provide those waivers for the first progress payment since they haven't received your money yet to pay their subs. My suggestion? Go ahead and make that first payment, but send a follow-up email stating that you expect them to obtain signed lien waivers from their subcontractors before you make any future payments. It's all about trust at this stage! If they want your business, they'll likely follow through.
I get what you're saying, but isn’t this always a bit of a chicken-and-egg scenario? Like, as a homeowner, I either pay upfront without the waiver, or the contractor needs to use their own funds to get waivers, right? Is it normal to pay the first installment asking for waivers later? And for the final payment, I plan to hold back some until everything is finished and inspected, so wouldn’t that just complicate things even more?