Escrow Agreement For Security Deposits In Lieu Of Retention

An escrow agreement used pursuant to this section shall be null, void, and unenforceable unless it is substantially similar to the following form:

Escrow Agreement For
Security Deposits In Lieu Of Retention

This Escrow Agreement is made and entered into by and between ________

_________________________ whose address is ________________________

_________________________ hereinafter called "owner,"

_________________________ whose address is ________________________

_________________________ hereinafter called "contractor," and

_________________________ whose address is ________________________

_________________________ hereinafter called "escrow agent."

For the consideration hereinafter set forth, the owner, contractor, and escrow agent agree as follows:

(1) Pursuant to Section 10263 of the Public Contract Code of the State of California, the contractor has the option to deposit securities with the escrow agent as a substitute for retention earnings required to be withheld by the owner pursuant to the construction contract entered into between the owner and contractor for __________ in the amount of __________ dated __________ (hereafter referred to as the "contract"). Alternatively, on written request of the contractor, the owner shall make payments of the retention earnings directly to the escrow agent. When the contractor deposits the securities as a substitute for the contract earnings, the escrow agent shall notify the owner within 10 days of the deposit. The market value of the securities at the time of the substitution shall be at least equal to the cash amount then required to be withheld as retention under the terms of the contract between the owner and contractor. Securities shall be held in the name of the __________, and shall designate the contractor as the beneficial owner.

(2) The owner shall make progress payments to the contractor for those funds which otherwise would be withheld from progress payments pursuant to the contract provision, provided that the escrow agent holds securities in the form and amount specified above.

(3) When the owner makes payment of retentions earned directly to the escrow agent, the escrow agent shall hold them for the benefit of the contractor until such time as the escrow created under this contract is terminated. The contractor may direct the investment of the payments into securities. All terms and conditions of this agreement and the rights and responsibilities of the parties shall be equally applicable and binding when the owner pays the escrow agent directly.

(4) The contractor shall be responsible for paying all fees for the expenses incurred by the escrow agent in administering the escrow account. These expenses and payment terms shall be determined by the contractor and escrow agent.

(5) The interest earned on the securities or the money market accounts held in escrow and all interest earned on the interest shall be for the sole account of contractor and shall be subject to withdrawal by contractor at any time and from time to time without notice to the owner.

(6) The contractor shall have the right to withdraw all or any part of the principal in the escrow account only by written notice to the escrow agent accompanied by written authorization from the owner to the escrow agent that the owner consents to the withdrawal of the amount sought to be withdrawn by contractor.

(7) The owner shall have a right to draw upon the securities in the event of default by the contractor. Upon seven days' written notice to the escrow agent from the owner of the default, the escrow agent shall immediately convert the securities to cash and shall distribute the cash as instructed by the owner.

(8) Upon receipt of written notification from the owner certifying that the contract is final and complete, and that the contractor has complied with all requirements and procedures applicable to the contract, the escrow agent shall release to the contractor all securities and interest on deposit less escrow fees and charges of the escrow account. The escrow shall be closed immediately upon disbursement of all moneys and securities on deposit and payments of fees and charges.

(9) The escrow agent shall rely on the written notifications from the owner and the contractor pursuant to Sections (1) to (8), inclusive, of this agreement and the owner and contractor shall hold the escrow agent harmless from the escrow agent's release, conversion, and disbursement of the securities and interest as set forth above.

(10) The names of the persons who are authorized to give written notice or to receive written notice on behalf of the owner and on behalf of the contractor in connection with the foregoing, and exemplars of their respective signatures are as follows:

On behalf of the owner: On behalf of the contractor:

_________________________________ _________________________________

Title Title

_________________________________ _________________________________

Name Name

_________________________________ _________________________________

Signature Signature

_________________________________ _________________________________

Address Address

On behalf of the escrow agent:

______________________________________

Title

______________________________________

Name

______________________________________

Signature

______________________________________

Address

At the time the escrow account is opened, the owner and contractor shall deliver to the escrow agent a fully executed counterpart of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement by their proper officers on the date first set forth above.

Owner Contractor

_________________________________ _________________________________

Title Title

_________________________________ _________________________________

Name Name

_________________________________ _________________________________

Signature Signature

7. Forms

1. Event Form

2.

RECORDED AT REQUEST OF:

WHEN RECORDED MAIL TO:


NOTICE OF COMPLETION (CESSATION)

STATE OF CALIFORNIA )
) ss
COUNTY OF ______________)

(or use Verification
by declaration under
penalty of perjury)

NOTICE IS HEREBY GIVEN THAT:

1. The undersigned is an owner of an interest or estate in the hereinafter described real property, the nature of which interest or estate is: fee simple (or otherwise, i.e., "purchaser under contract" or "lessee").

2. The full name and address of the undersigned owner and of any and all co-owners are:

NAME STREET AND NO. CITY STATE

_____________________________________________________________

_____________________________________________________________

3. On the ________ day of ______________________, 199_____, there was completed upon the hereinafter described real property a work of improvement as a whole

_____________________________________________________________

_____________________________________________________________

If a particular portion of the work was completed, strike out the words "work of improvement" as a whole" and insert "portion of work of improvement, consisting of," describing such portion.)

4. The name of the original contractor for the work of improvement as a whole was ______________________________________________
(If none, insert "No Contractor")

5. The real property herein referred to is situated in the City of __________________, County of ____________________, State of California, and described as follows:

(Description sufficient for identification)

The street address of said property is: ______________________

______________________________________________________________.

_____________________________
Owner

By __________________________
Owner's Agent


CONDITIONAL WAIVER AND RELEASE UPON FINAL PAYMENT

(California Civil Code §3262(d)(3))

Upon receipt by the undersigned of a check from: _________

_____________________________________________________

in the sum of $_____________________________, payable to _______

_____________________________________________________

and when the check has been properly endorsed and has been paid by the bank upon which it is drawn, this document shall become effective to release any mechanic's lien, stop notice, or bond right the undersigned has on the job of [Owner] ____________

_____________________________________________________

located at [Job description]_______________________

____________________________________________________.

This release covers the final payment to the undersigned for all labor, services, equipment or materials furnished on the job, except for disputed claims for additional work in the amount of $__________. Before any recipient of this document relies on it, the party should verify evidence of payment to the undersigned.

Dated: _____________________ _____________________________
[Company Name]
By __________________________
[Title of Co. Representative)

NOTE: This form of release complies with the requirements of Civil Code §3262(d)(3). It is not effective until the check that constitutes final payment has been properly endorsed and has cleared the bank.

Unconditional Waiver and Release
Upon Final Payment
(California Civil Code §3262(d) (4))

The undersigned has been paid in full for all labor, services, equipment or material furnished to

________________________________________________________________

on the job of __________________________________________________

located at _____________________________________________________

and does hereby waive and release any right to a mechanic's lien, stop notice, or any right against a labor and material bond on the job, except for disputed claims for extra work in the amount of

$_______________.

Dated: _____________________ _____________________________

By __________________________

NOTICE: THIS DOCUMENT WAIVES RIGHTS UNCONDITIONALLY AND STATES THAT YOU HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. THIS DOCUMENT IS ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID. IF YOU HAVE NOT BEEN PAID, USE A CONDITIONAL RELEASE FORM.

NOTE: This form of release complied with the requirements of Civil Code §3262(d) (4).

Unconditional Waiver and Release
Upon Final Payment
(California Civil Code §3262(d) (4))

The undersigned has been paid in full for all labor, services, equipment or material furnished to

_____________________________________________________________

on the job of ___________________________________________________

located at _____________________________________________________

and does hereby waive and release any right to a mechanic's lien, stop notice, or any right against a labor and material bond on the job, except for disputed claims for extra work in the amount of

$_______________.

Dated: ___________________________ _________________________________

By __________________________

NOTICE: THIS DOCUMENT WAIVES RIGHTS UNCONDITIONALLY AND STATES THAT YOU HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. THIS DOCUMENT IS ENFORCEABLE AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID. IF YOU HAVE NOT BEEN PAID, USE A CONDITIONAL RELEASE FORM.

NOTE: This form of release complied with the requirements of Civil Code §3262(d) (4).