• California Waiver Templates 

  - Unconditional Waiver and Release Upon Final Payment

  - Unconditional Waiver and Release Upon Progress Payment

  - Conditional Waiver and Release Upon Final Payment

  - Conditional Waiver and Release Upon Progress Payment

• The original contractor may not waive the lien on behalf of subcontractors or materialmen.
• Waiver of lien rights is permitted provided that the release follows substantially one of the forms set forth in CA 3262 and is signed by the claimant or his or her authorized agent, and, in the case of a conditional release, there is evidence of payment to the claimant. Evidence of payment may be by the claimant's endorsement on a single or joint payee check that has been paid by the bank upon which it was drawn or by written acknowledgment of payment given by the claimant.
• Pay-if-paid clauses are not enforceable in California.
• “Pay when Paid” not enforceable in California
• Pay-when-paid clause in the subcontract did not create a condition precedent to payment.
• S.B. 293, effective as of January 1, 2012, capped retention on public contracts at 5%. It also shortened, from 10 days to 7 days, the deadline by which contractors higher up in the ladder of supply must pay subcontractors after the higher-tier contractors receive progress payments.

Retainage Provisions

Public

• CAL. PUB. CONT. CODE § 10261. Payments upon contracts shall be made as the department prescribes upon estimates made and approved by the department, but progress payments shall not be made in excess of 95 percent of the percentage of actual work completed plus a like percentage of the value of material delivered on the ground or stored subject to or under the control of the state, and unused, except as otherwise provided in this section. The department shall withhold not less than 5 percent of the contract price until final completion and acceptance of the project. However, at any time after 95 percent of the work has been completed, the department may reduce the funds withheld to an amount not less than 125 percent of the estimated value of the work yet to be completed, as determined by the department, if the reduction has been approved, in writing, by the surety on the performance bond and by the surety on the payment bond. A contractor may substitute securities in lieu of retainage or request that paymentsbe made into an escrow account. CAL. PUB. CONT. CODE § 10263.

Private

•  CAL. CIV. CODE §§ 8812.  If an owner withholds a retention from a direct contractor, the owner shall, within 45 days after completion of the work of improvement, pay the retention to the contractor. If part of a work of improvement ultimately will become the property of a public entity, the owner may condition payment of a retention allocable to that part on acceptance of the part by the public entity. If there is a good faith dispute between the owner and direct contractor as to a retention payment due, the owner may withhold from final payment an amount not in excess of 150 percent of the disputed amount.