California lien waivers: forms, rules and retainage.
What California law requires of lien waivers and releases, the forms contractors and suppliers use, and how much retainage can be held, with the statute behind each point.
Checked against the California statutes on 2026-11-13 · General information, not legal advice
In short
California requires four statutory forms in Civil Code sections 8132-8138: conditional and unconditional, each for progress and final payment. Any other waiver is void unless the claimant was actually paid in full, and contract terms that waive a claimant's rights are void until a statutory waiver is signed and delivered. A conditional waiver takes effect only when the check clears. New for 2026: retainage on most private projects is capped at 5% for contracts entered into on or after January 1, 2026.
The California waiver forms set by statute.
The four forms must be in substantially the statutory form and signed by the claimant (Civil Code 8124). The conditional forms are effective only on the claimant's receipt of payment from the bank the check is drawn on. The progress forms don't waive retention, unpaid extras or other contract rights.
| Form | Type | When it's used |
|---|---|---|
| Conditional Waiver and Release on Progress Payment (8132) | Conditional · Progress payment | With each progress billing; effective once that check clears. |
| Unconditional Waiver and Release on Progress Payment (8134) | Unconditional · Progress payment | After the progress payment has actually been received. |
| Conditional Waiver and Release on Final Payment (8136) | Conditional · Final payment | With the final billing; effective once final payment clears. |
| Unconditional Waiver and Release on Final Payment (8138) | Unconditional · Final payment | After final payment, including retention, is received. |
What California law requires.
Statutory waivers only
Any oral or written waiver is void unless it's a statutory waiver or the claimant was actually paid in full (Civil Code 8126).
No waiving rights in the contract
A contract term that waives or impairs a claimant's rights is void until the claimant signs and delivers a statutory waiver (Civil Code 8122).
Proof of payment for conditional releases
A conditional release needs evidence of payment: your endorsement on a check the bank has paid, or a written acknowledgment of payment (Civil Code 8124(b)).
Progress waivers keep retention
The progress forms don't release retention, unpaid extras or contract and breach rights, so keep separate track of what's still owed.
How much can be held back in California.
| Private projects | 5% of each payment and of the contract price, for contracts entered into on or after January 1, 2026 (Civil Code 8811, added by SB 61). It doesn't apply to non-mixed-use residential projects of four stories or fewer, or where a subcontractor fails to provide a performance and payment bond it was told about before bidding. |
|---|---|
| Public projects | 5% of each payment and of the contract price, unless the public entity makes a finding that the project is substantially complex (Public Contract Code 7201). |
| Release | Private: the owner pays retention within 45 days of completion and the direct contractor pays subcontractors within 10 days of receiving it, with a 2% a month penalty for late payment. Public: within 60 days of completion, subcontractors within 7 days, also 2% a month. |
Source: California Civil Code 8811-8818 and Public Contract Code 7107, 7201 (statute text). Contracts can set lower retainage; read yours alongside the statute.
Collecting waivers without the paper chase.
On a busy job, a general contractor collects a conditional waiver from every subcontractor and supplier with each pay application, swaps it for an unconditional one once payment clears, and tracks retainage owed on every subcontract until final completion. Missing one waiver can hold up the owner's payment for everyone.
Agenbord Build for general contractors is designed to request, collect and match waivers to each payment and keep retainage per subcontract, so the next pay application isn't waiting on paperwork. It's in early access. See also our guides to construction pay applications and retainage.
California lien waivers: common questions.
Is retainage capped in California?
Yes, now on most private projects too. For contracts entered into on or after January 1, 2026, Civil Code 8811 caps retention at 5% of each payment and of the contract price, with exceptions for smaller residential projects and some unbonded subcontracts. Public projects have been capped at 5% under Public Contract Code 7201.
When does a California conditional waiver become effective?
Only when the claimant actually receives payment from the bank on which the check is drawn. Until then it doesn't release anything.
Do California lien waivers need to be notarized?
No. The statutory forms don't include a notary requirement.
What happens if I sign a non-statutory waiver in California?
It's void unless you were actually paid in full. California only recognizes waivers in substantially the statutory form, signed by the claimant.
Sources
- California Civil Code 8122, 8124 and 8126 (statute text)
- California Civil Code 8132 - Conditional waiver on progress payment (statute text)
- California Civil Code 8811 - Private retention cap (statute text)
- California Civil Code 8812, 8814 and 8818 - Retention release (statute text)
- California Public Contract Code 7107 and 7201 (statute text)
- California Legislative Information - official codes site
General information about California law as checked on 2026-11-13, not legal advice. Lien law is technical and deadlines are strict; have a construction attorney review your forms and process.
