Sep
11
Can a mortgage company keep money from a homeowners insurance settlement without paying contractor?
ByI work for a contracting company and recently we changed the roof on a house that was damaged by a storm. The insurance company sent a check to pay for the work done on the roof. The check was drawn out to the owner of the house and the mortgage company, the owner told the mortgage company to keep the money from the insurance settlement to pay for his past mortgage payments and now the owner has not paid us (the contractor) and the mortgage company refuses to hand over the proceeds to us (the contractor), when the roof has been completely repaired. Is this legal?
1 Comments
September 11th, 2009 at 03:22
file your contractor’s lien on the property immediately. [you did file the necessary building permits and forms, yes?]
then sue. you argument in court is that because your work was necessary to get the house into salable condition, your lien should be paid before the mortgage, just as if the mortgage company had foreclosed and hired you to repair the property.
and get a competent attorney — who ever drew up your present contracts seems to be a fool. your contracts should have required the owner and mortgage company to bind over the payment to you in advance of you starting the work, with payment to be completed after the roof is inspected and accepted.