Lien Releases in California: How to Pay a Contractor Safely

What a mechanics lien is

Every home improvement contract in California has to include a notice headed MECHANICS LIEN WARNING. It explains: “Anyone who helps improve your property, but who is not paid, may record what is called a mechanics lien on your property,” and “Even if you pay your contractor in full, unpaid subcontractors, suppliers, and laborers who helped to improve your property may record mechanics liens and sue you in court to foreclose the lien” (B&P Code §7159).

That’s the risk this guide is about: paying for the same work twice. The tools below are the ones the law itself points to.

Preliminary notices: who might lien your home

Before a subcontractor or supplier can record a lien, they generally have to send you a preliminary notice (Civil Code §8200). It isn’t a lien. It tells you that the sender has lien rights on your project. Each one carries a “NOTICE TO PROPERTY OWNER” in bold type that suggests “requiring your contractor to provide a signed release by the person or firm that has given you this notice before making payment to your contractor” (§8202).

Three things to know:

Timing. The notice is due within 20 days after the claimant first provides work. A late notice still counts, but only for work done in the 20 days before it was given and after (§8204). So a notice can arrive after you’ve already paid for that work.
Who doesn’t send one. Laborers, and the contractor you hired directly, aren’t required to send you a preliminary notice (§8200(e)). As the contract warning puts it, “The law assumes that you already know they are improving your property” (§7159).
Keep every notice. Together they list the subcontractors and suppliers who have told you they can claim a lien; laborers and your own contractor won’t be on it.

Before each payment

The contract warning itself suggests these steps (§7159):

Get a list from your contractor of the subcontractors and suppliers on the job, and when each started work or delivered material.
Wait 20 days, “paying attention to the Preliminary Notices you receive.”
Consider a joint check: when it’s time to pay for work by a subcontractor or supplier who sent you a preliminary notice, “write a joint check payable to both the contractor and the subcontractor or material supplier.”

The preliminary notice itself suggests asking for a signed release from the person who sent it before you pay your contractor (§8202). The forms are below.

The four lien release forms

California law sets out four release forms, and the wording matters. A release generally doesn’t protect you unless it is “in substantially the form provided” by the statute and signed by the claimant (§8124). Any other “oral or written statement” giving up lien rights is “void and unenforceable” unless the claimant has been paid in full (§8126).

Form	Use it	Section
Conditional Waiver and Release on Progress Payment	With a progress payment, before the money clears	§8132
Unconditional Waiver and Release on Progress Payment	After that progress payment has been received	§8134
Conditional Waiver and Release on Final Payment	With the final payment, before the money clears	§8136
Unconditional Waiver and Release on Final Payment	After the final payment has been received	§8138

Conditional releases work only once payment arrives. The form says so in capitals: “A PERSON SHOULD NOT RELY ON THIS DOCUMENT UNLESS SATISFIED THAT THE CLAIMANT HAS RECEIVED PAYMENT” (§8132). The law accepts as proof of payment the claimant’s endorsement on a check that has cleared, or a written acknowledgment of payment (§8124).

Unconditional releases are binding once signed. The form warns the person signing that it is “ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID” (§8134). So the conditional form is for a payment that hasn’t cleared yet, and the unconditional form is for after it has.

Read the exceptions on each form, too. A progress release doesn’t cover retentions or unpaid extras (§8132), and the final release forms leave room to list “Disputed claims for extras” (§8136, §8138).

When the job is done

A project counts as complete on actual completion, when the owner moves in or uses it and work stops, after 60 days in a row with no work, or when a notice of cessation is recorded after 30 days in a row with no work (§8180).

You can record a notice of completion on or within 15 days after completion; the owner signs and verifies it, and a notice that doesn’t meet the statute isn’t effective (§8182). Recording one shortens the time others have to record a lien:

Your direct contractor: before the earlier of 90 days after completion or 60 days after a notice of completion or cessation is recorded (§8412).
Subcontractors and suppliers: before the earlier of 90 days after completion or 30 days after a notice of completion or cessation is recorded (§8414).

Owners who record a notice of completion normally must send copies within 10 days to the direct contractor and to anyone who sent a preliminary notice; the notice doesn’t shorten the deadline for anyone who should have been sent a copy and wasn’t. That copy rule doesn’t apply to an owner who lives in the home, if it has four or fewer units (§8190).

Once a lien is recorded, the claimant has 90 days to file a lawsuit to enforce it, or “the claim of lien expires and is unenforceable,” unless the owner agreed to extend credit and that was recorded (§8460).

Keep a paper trail

Keep the contract, change orders, every preliminary notice, every release, and copies of the checks. If a lien is recorded on your home, talk to a lawyer; this guide is general information. Our guide on hiring a licensed contractor covers contracts, down payments and the right to cancel.

Lien releases: how to pay a contractor without paying twice