First, the property owner needs to ensure the contractor's agreement is clear, concise, and well drafted. The contract should contain a payment schedule that states when specific aspects of the work start and end and the price for each segment, a list of the names, addresses, and license numbers of each subcontractor and supplier for each segment, and a clause that provides for the withholding of the final payment for a period that exceeds the time for a subcontractor or supplier to file a lien. California law permits a property owner to withhold funds owed to the original contractor if a subcontractor or supplier records a lien. If the subcontractor or suppliers has a judgment entered against the owner, the owner can deduct the amount of the judgment plus costs from the amount owed to the original contractor. If the owner has already paid the original contractor in full, or the judgment plus costs is more than the owner still owes the original contractor, the owner can recover back the excess amount from the original contractor.

Second the property owner should ensure that the general contractor and each sub-contractor is paid with a "joint check" - a check made out to both the general contractor and the subcontractors and suppliers for each segment of the project. A joint check ensures that both parties will have to endorse the check and in turn that the general contractor pays the subcontractors and suppliers.>/p>

Third, the property owner should require the general contractor, as well as all subcontractors and suppliers to sign an unconditional lien release for each segment of the work performed and paid for. By law, the property owner may withhold the next payment until he or she gets the signed unconditional releases for the previous payment.

Finally, the property owner should file a Notice of Completion with the County Recorder's office as soon as the work is completed. This will have the effect of reducing the amount of time a contractor, subcontractor or supplier has to record a Notice of Claim from 90 days to 60 days and 30 days respectively. If the residential property was not owner-occupied, the property owner should within ten (10) days of recording the Notice of Completion with the County Recorder, send a letter via certified mail notifying each person who provided a 20-Day Preliminary Notice that the Notice of Completion was recorded