Contractor paid, but he didn't pay subcontractors.

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    • #3073
      CuriousCajun
      Participant

      I have a meeting with our attorney next week regarding this. But when you have a burning question, that feels like forever. Hoping for a bit of info before then.

      I haven’t been here in a long time and I hope Lex and 3kidsmom are still here.

      *House was damaged by a stranger who drove into it drunk.

      *Hired licensed contractor.

      *Only signed one contract with contractor, and one Waiver of Lien. They were for the amount of $33,xxx.xx

      *It has been 3 months, since work started, and about 3 weeks since contractor sent insurance company final quote for $65,xxx.xx. However, the contractor has refused to give us a final contract signed by him and for us to sign.

      *All checks that have come to us, were made out to me & my husband and mortgage company. We endorsed each one and sent them overnight to the mortgage company, so contractor could be paid ASAP.

      *Contractor didn’t complete all small jobs, and what was finished isn’t holding up. EX: Soffit trim is already falling off, corners in new walls are already cracking.

      *Contractor refuses to fix any problems due to his faulty work, until he is paid the remainder of his quote to the insurance.

      *Remainder of quote is $17,xxx.xx. The mortgage company has the money, will not release it without signed final contract.

      *Contractor has been paid $43,xxx.xx. However, he has not paid some of his employees, and hasn’t paid any of the subcontractors.

      Because there is unfinished & faulty work, and contractor refuses to provide a final signed contract, the mortgage company has frozen the remaining $17,xxx.xx.

      The contractor has informed us he is taking legal action against us and placing a Lien on our home for non-payment. Also, his subcontractors have started coming to our home and calling us wanting their money. They are telling us that the contractor is telling them we aren’t paying him!

      Questions:

      Can the contractor sue us/put a Lien on our home when it is his fault the remaining funds are frozen by the mortgage company until work is completed and he refuses to give us a final signed contract? We only have the one signed contract and Waiver of Lien for the amount of $33,xxx.xx; he has been paid 43,xxx.xx.

      Can the subcontractors sue us for payment/put a Lien on our home because the contractor won’t pay them?

      Sorry for the length of post, I wanted to give all facts.

      TIA

    • #3074
      Lex
      Keymaster

      First things first. What reason did the contractor give you for not wanting to provide the final contract?

    • #3075
      CuriousCajun
      Participant

      He hasn’t given a reason. He just ignores the requests. He texted me one day and asked if I would call the mortgage company and ask where they were with with getting the remaining funds released. I told him again, “You know we have to have a signed final contract, or they won’t release the funds.”

      About an hour later, he showed up at our house with a one page Final Bill. But it wasn’t a contract.

      Me: “You know the mortgage company isn’t going to accept this.”

      Him: “Here I’ll sign it.”

      Me: “We have been over this repeatedly. The mortgage company isn’t going to release the funds without a signed contract from your company and signed by us.”

      I called the mortgage company and they said I was correct, that is their policy. They have to have a signed final contract showing what work he is charging for. They asked me if wanted them to call him, and I said, “Please, because I can’t get him to give me a final contract to sign.”

      The mortgage company called me back and told me the contractor said he was tired of them withholding his funds and he was going to put a Lien on our house.

      I reached out to him by text one more time and asked for a final contract. He told me he’s was done with this and was taking legal action action against us for non-payment.

    • #3076
      Lex
      Keymaster

      From my experience with construction liens, there is not much you can do to prevent a lien being filed. However, if the lien is improper, you can sue to have the lien removed. From what you describe, that should be fairly easy to do.

      When we have filed suit to remove a lien, it usually resulted in the person who filed the lien suddenly getting more cooperative.

      Subs that file liens are a bit more of a problem. Usually those liens will sit there until the problem with the contractor is resolved.

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