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Can a homeowner not get his money back if he pays for the invoice and has paid the contractor in the state of Iowa?

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We have a contractor that has not paid us, but has been paid by all homeowners. One homeowner is saying that if he pays the invoice owed to me to get the lien off his house he has no way to collect the money he paid the contractor. Supposedly the state of Iowa changed it in 2013 for this to be correct?

1 reply

Jan 30, 2019
Good question. There's definitely the potential for tension when payment has been made to a contractor, but that contractor failed to pay their subs, suppliers, etc. (and this typically manifests itself in the division between Full Price vs. Unpaid Balance states). In Iowa, regardless of whether a property owner has made full payment to their contractor, an unpaid subcontractor or supplier is entitled to make a lien claim in the full amount that they're owed and unpaid. But, as mentioned above, the question remains - does the owner have a way to recover from the contractor if they're forced to pay twice? Luckily, under § 572.30 of the Iowa lien statute, this issue is clarified some. Under that section, "If a general contractor...fails without due cause to pay a subcontractor as required by this section, the subcontractor, or the owner by subrogation, may commence an action against the general contractor or owner-builder to recover the amount due." Put more simply, an owner will be able to sue a contractor based on the contractor's failure to pay their subs, if the subcontractor who would otherwise have a claim subrogates their claim to the owner (allows the owner to bring a claim as if they were the subcontractor, themselves). Further, regardless of that section, where an owner is required to pay the debts owed by the contractor to their subs/suppliers, that owner will very likely have other causes of action against the contractor.
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