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contractor doesn't want to provide final draw and waiver.

What do we do if a contractor doesn’t turn in his final draw request even after asking repeatedly for it? Can we “close out” the project without a final draw if the property owner says the project is done 100% and you have inspected to confirm it is close to being done but we haven’t disbursed all the funds to the contractor? The owner would like to wrap this up and have remaining funds disbursed to him since the contractor has refused to submit invoices or documents to complete their final draw. We have the Certificate of Occupancy already, the business is open and operating, and your last inspection shows it was 92 complete but the owner says it is now (and has been since February) 100% complete.

1 reply

Jun 24, 2020

It sounds like you may be asking from the perspective of a lender. If that's the case, directly contacting the GC and making additional requests for the final bill would be a good idea. Even if the GC has been unresponsive and dropped the ball on billing, they're still going to be owed payment. Calling, texting, emailing, sending certified mail, etc. - however you can contact the GC, it'd be wise to force them to at least discuss the issue. Taking any actions that are out of line with your lending agreement would not be wise. That means a thorough review of the lending agreement and the GC's contract may be in order. If the funds become unavailable to the contractor, they can cause issues with the project property. Or, if funds are improperly disbursed, then a lender could become liable. Ultimately, you or the owner might prefer to close out the account - but that doesn't necessarily mean it's the right or smart thing to do. With all of that being said, I don't have much experience with construction lending issues - so it'd be wise to consult a local Hawaii construction lawyer for help. They'll be able to review the documents and circumstances and advise on how to proceed while limiting liability.

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