Remodeling Contract

[Harthar]

state is iowa. in our remodeling contract with our contractor, it stated our work would be done according to local and state laws and regulations. we found out proper permits and work by necessary licensed individuals were not acquired or used, therefore, a breach against contract. Work was stopped independently by the city until proper permits we pulled. contractor/homeowner relationship rocky due to this issue. homeowners allow contractor to finish job once proper permits are pulled and under supervision of a construction foreman. however, the homeowners, due to above breach and contractor attempt at physical intimidation, have decided to put the remaining funds due in an escrow account payable to contractor when job is finished, instead of paying a 30% installment due per the contract(60% already paid). we are fairly certain contractor would not finish job after installment is made. contractor is now claiming that dispite the permit issue, we are still in breach of the contract by not paying our installment, and, if we want to go the escrow route, he wants us to release all liability on the work. unbelievable!!!

our claim is that due to the fact that good faith has been breached by the contractor (with proven records from the city building department), according to our limited read on contract law, the escrow route is deemed a reasonable way to bring the transaction to a conclusion.

would this be a correct assumption? all replies will be very much appreciated. thanks, harthar

 

[loku]

Escrow on construction contract

If what you said is that after the needed permits were issued, you agreed with the contractor to have the contractor finish the job, then the payments specified in the contract are due according to the terms of the contract. And if you do not pay them, you are in breach of the contract.

You could have required the contractor to agree to the escrow as a condition of your allowing the continued work on the project after the contractor breached. By not doing so then, you effectively agreed to the terms of the contract as written.