California Supplemental (CSE) Practice Exam

What is required from the contractor at final payment to ensure all subcontractors have been paid?

1. A lien release

2. A change order

3. A performance bond

4. A final walkthrough

The correct answer is: A lien release

The requirement for a contractor to provide a lien release at final payment is crucial for ensuring that all subcontractors and suppliers have been compensated for their work on a project. A lien release is a legal document that states that the contractor has paid all suppliers, subcontractors, and laborers involved in the project. By presenting this document, the contractor protects the property owner from potential mechanic's liens, which are claims against the property for unpaid work. When a lien release is submitted, it verifies that the contractor has fulfilled their obligation to settle accounts with all parties, ensuring that the project is free of claims that could cloud the title. This is particularly important in construction projects, as it safeguards against disputes that might arise after the project is complete. Other options, such as a change order or performance bond, serve different purposes within construction contracts and do not directly relate to the settlement of payments to subcontractors. A final walkthrough, while important for assessing project completion, does not affirm or guarantee payment status for those involved in the work. Thus, the lien release is the most appropriate choice for this context.