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Are subcontractor disputed amounts required to be disclosed on an Affidavit for Payment to a bank?

OhioLien WaiversMechanics LienPay When PaidPayment DisputesPrompt Payment

We completed a home renovation where the contractor walked off the job, filed a lien against us, and then filed a lawsuit. An attorney friend recommending settling to avoid the cost of court/arbitration. After the settlement was signed we learned that the contractor (and his attorney) were intentionally holding back payments to the HVAC subcontractor and tile/flooring subcontractor. The HVAC contractor contacted us directly and specifically stated the contractor and attorney are not responding to him. The tile/flooring contractor actually sued the GC after we settled. The problem is, these amounts were never disclosed to our attorney or to our bank via the Affidavits per payment. It would have changed our mind about suing since we could prove fraud. I'm not sure if the contractor can claim this is a dispute between him and the subs and therefore isn't required to be disclosed to the bank. I believe (I'm an foresnic accountant/CPA) it's fraud since they filed a lien and lawsuit based on false/represented amounts. I'm on the fence of reporting to the police and/or suing for fraud in obtaining a settlement.

1 reply

Oct 28, 2020
You should review the language of your settlement agreement carefully before filing any further claims. Most settlement agreements are extremely broad releasing the party from each and every claim, whether known or unknown.
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