Contractor Received Payment Before The Job Was Complete
For various reasons I used a Contractor that was referred to me by my hard money lender.
The contractor did not have to follow the procedures set forth by my lender because of their working relationship. Now the guy has been paid $20,000 and has not completed the job.
I've tried to reach him but I have not been able to. My lender says she does not want to get involved and that I should contact the title company because they released the money without her approval. It's been a week and no one will return my calls.
Does anyone have advice on how I should proceed?
i've been unvolved with a similar problem. i found myself with 2 solutions. get the contr. back to work or sue. i threatened to sue and he return and continued work until his work meet the money that was paid and then he was fired and another hired to complete....kenmax
Try to visit the contractors home if he will not return your calls. Next try:
1. File a complaint and request warrant isue for failure to complete work. (Requires some preliminary letters, etc)
2. File with BBB
3. File complaint with your local news action reporter
4. File a complaint with the state licensing board for general contractors
5. If none of that lights a fire for him to complete work, get an attorney and sue.
Well since you are here in Chicago there is some very interesting Illinois case law regarding lender liability.
If you hired the contractor at the suggestion, hint, referral or insistence of your lender then the lender may be liable for his actions.
The exact case involved the 666 Lake Shore Drive building many years ago. The condo conversion there got into some trouble and developer took certain management actions at the insistence of the lender. When the lender later foreclosed and attempted to chase the developer relative to his personal guarantee the judge ruled (and the court of appeals affirmed) that by interferring with the management of the project the Lender had released the developer from management responsibility and could therefore not go after him personally.
The point is that if a lender suggests a contractor and that contractor fails to perform and you suffer losses as a result of that failure the lender may be responsible for the losses.
reminder the lender that it's her collateral that he didn't finish. So it's in her best interest to help.
You might interpret the facts this way.
HEY LENDER! you made me go w/ this contractor of yours and now they FU****-up. Guess who's going to sitting next to him at the defendant table.
Thanks for the responses. I will get on this matter first thing in the morning. It's been over a week since he's been paid and the work is not complete. Also, I do not want him to continue because I'm not happy with the work that has been completed thus far. Lastly, I'm not sure how he is a licensed and boned contractor because he does not do any of the work himself and the guys that work for him are not professionals.
Yaisa
As a general comment to others reading this.
Even if you feel the lender wants you to use a specific contractor that is no excuse to not verify their license, the status of their insurance, etc.
If you are getting work done by a contractor who does not have a license you can be liable for any worker comp issues arise, have the sale held up because work was not done to code (code requiring a licenses contractor), etc.
John
[addsig]
check w/ the state licensing board, they can tell you license and some insurance status, and may be able to help you collect.
As to the contractor finishing the work, you may have to give him a chance to finish / correct defects.
If he's not licensed you do have recourse.
how was he paid before you authorized it to happen? :-?
Maybe things are a little different in Ill: but out here in Calif. If an Escrow or a Construction Control Account, or a Title company are dispursing funds, they must have prior to funding, releases of material and labor and an ok from you the friendly owner.
Go call upon him and talk it over. Try to get it solved prior to involving the attorneys. Most of them are lousy carpenters, always talking and never seem able to reach out and grab when the occasion requires. This has happened to me on many occasions. Mostly it can be solved by your meeting with the nice man. No do not carry a gun, just talk and if you see if is not happening then advise him of all the terrible things that will now happen. Report to the Contractors Board. Notification of all Suppliers and of course all employed labors etc.
Most of the time I could handle the problem. Although once I had to show up and work the site for the next three weeks until he could straighten out his little problem. All part of the building game. Only time I really took a bath is when I lent the license to a dear relative. Oh my god. Did that cost. Yip.
Cheers Lucius 8-)