Grand Junction, CO asked in Real Estate Law for Colorado

Q: Our builder is defaulting on 20k of bills owed on our build project we paid him in full for. How do we protect ourselve

Most of the money is owed to a lumber store.

Can creditors still pursue us after the lien period is done or would they then be required to pursue the builder who actually owes the funds and used out money to pay other debts?

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2 Lawyer Answers
James Alan Greer
James Alan Greer
Answered
  • Boulder, CO
  • Licensed in Colorado

A: Dear California Homeowner: If your contractor is licensed in the state of California, then you have three steps to take, in my opinion: (1) send a "legal demand letter" to the Contractor demanding they pay the supplier and any other suppliers/subs owed money within the next 72 hours (copy the supplier); then (2) if the Contractor does not comply with your demand immediately contact the CSLB and lodge a "Consumer Complaint" whereby your complaint sounds in "willful diversion of monies" against the Contractor; and (3) you could also contact the Contractors "Surety" on the "Contractor's License Bond" and lodge a claim against the Contractor for the same "willful diversion of monies" complaint description. If your contractor is NOT licensed, then you're only able to pursue the first of these three action items (see above), and thereafter continue to indicate/demand to the contractor that you may be forced to file a lawsuit against them in the event they don't pay all subs/suppliers.

Let me know if you need assistance. JIM GREER is an attorney licensed to practice in CA and CO and has specialized in construction/real estate matters for the past 30 years; nothing herein shall be construed as the offering of legal advice insofar as Mr. Greer is not in an attorney-client capacity with the inquiring party. 858.481.9006

1 user found this answer helpful

Donald C Eby
Donald C Eby
Answered
  • Castle Rock, CO
  • Licensed in Colorado

A: Do you have a contract?

Did your builder sign lien releases when you paid him?

Has the lumber supplier send a notice of intent to lien?

This issue is very common. We need to put pressure on builder to make payment to the lumber supplier in order to prevent you from suing him for 3x that amount.

You should contact an attorney to discuss mechanic's lien defenses and Trust Fund Act violations and penalties.

1 user found this answer helpful

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