<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by kdombrow:
I authorized a draw for $10,500 to the contractor that was building our new home. The signed authorization did not specify which sub-contractors would be paid from that amount. We then learned, through the title company handling our account, that the contractor FORGED lien waivers in the amounts of $6,500; $4,000; and $4600 but did not pay the sub-contractors. The title company eventually recovered the money from the contractor but by then one sub-contractor (who properly filed lien rights)was owed $10,500 and was only paid the amount on the forged lien waiver ($6500). The title company also paid the sub-contractor that was owed $4000 but that company had no lien rights. I did not authorize the title company to proceed with any of the latter transactions. The title company is still after me to pay the additional $4000 owed to the sub w/lien rights when I feel the full amount should have been paid to them with the money recovered from the contractor. I'm out $4000 - what can I do to recover this? I really feel the title company is at fault.<HR></BLOCKQUOTE>
If the title company is in error, tell them that if the matter is not resolved you will file a complaint with the state regulatory agency. This title company should also have errors and ommissions insurance which I am sure the insurance company would force the title company to settle.
If the money is in fact owed to the primary contractor for work completed by a subcontractor, then you owe the money regardless of the issue of lien rights or no lien rights and the title company making a mistake. If this is not the final construction draw to be paid upon substantial completion, walk though inspection punchlist and issuance of the certificate of occupancy then you are not out the money. The $4000 amount would be money owed by you for construction work completed to date.
You would be wise to have the project architect certify percentage of completion by various trades ie. concrete, framing, roofing, plumbing, electrical etc. to insure that you are paying for actual work completed. You should also keep in contact with all the subcontractors to confirm that they actually signed their lien releases. Since the primary contractor can not be trusted you need to make sure that you are in total control of the construction and funding.
