Direct payments may not be a good idea. Sometimes a contractor who runs short of cash at the end will ask the owner to pay the last accounts directly (getting receipts, of course) and deduct them from the contractor's final check. You might be all right paying subcontractors and suppliers directly, but not the contractor's own employees: You don't want to look like an employer yourself, and you don't want to interfere with the contractor's special responsibilities, such as withholding income taxes and paying insurance and Social Security.

Another approach is to ask the contractor to get lien waivers from everyone who the contractor is responsible for paying. In California and many other states, a contractor must provide a waiver for all work for which the contractor has been paid (in the absence of a performance or similar bond), before accepting any further payment from the owner for additional work. In some states, neither the contractor nor the subcontractor may "waive" his or her mechanic's lien rights until payment is actually made, but in other states a waiver is permitted.

It helps to be organized. You should collect all papers on your project in one file, including any written notices of goods or services provided by contributing suppliers or subcontractors. Before you write the contractor that one final check after the project is finished and passes official inspection, it's only prudent to check in with anyone who sent you one of those notices. You might also want to check in with the last workers and subcontractors, even if they haven't sent you any notices yet (especially if they still have time to do so). Then you'll know which waivers to look for at your last meeting with the contractor.