Legal Memorandum: Mechanic's Liens and Payment Bond Claims

Issue: Under Minnesota and California law, are there mandatory forms prescribed by statute governing the final conditional, final unconditional, partial conditional, and partial unconditional release of mechanics’ liens or payment bonds? If mandatory, are the forms void if modified by clarifying language indicating their applicability to payment bonds?

Area of Law: Banking & Finance Law, Litigation & Procedure
Keywords: Mechanic's liens; Standard form; Waiver
Jurisdiction: California, Minnesota
Cited Cases: None
Cited Statutes: Cal. Civ. Code § 3262, § 3262(a), § 3262(d)
Date: 12/01/2005

Waivers of mechanic’s liens and payment bond claims are governed by Cal. Civ. Code § 3262.  Section 3262(a) provides:

Neither the owner nor original contractor by any term of their contract, or otherwise, shall waive, affect, or impair the claims and liens of other persons whether with or without notice except by their written consent, and any term of the contract to that effect shall be null and void.  Any written consent given by any claimant pursuant to this subdivision shall be null, void and unenforceable unless and until the claimant executes and delivers a waiver and release.  That waiver and release shall be binding and effective to release the owner, construction lender, and surety on a payment bond from claims and liens only if the waiver and release follows substantially one of the forms set forth in this section 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.

The statute continues to provide separate standard forms for conditional partial waivers, unconditional partial waivers, conditional final waivers, and unconditional final waivers.  Cal. Civ. Code § 3262(d).

Although the statute does not explicitly state that the prescribed forms are mandatory, it suggests that minor variations from the statutory forms do not render the waiver invalid or unenforceable.  So long as the waiver “substantially” follows the prescribed forms, the waiver appears to be enforceable.  The prescribed forms, however, appear to […]

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