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I signed a waiver of lien for regions bank there is a balance of 12,600.00 owed to me I spoke with the insurance company

Today and they told me that the claim had been paid in full so that means that regions name did not get put on the check that was only on about 4000 So there fore the customer has gotten the check for 4000and regions is waiting on us to settle the claim but they will not release the other part of the money till it comes to a settle ment so I do not know we’re that leaves me what I’m saying is regions has 8600 and the customer has 4000 and we’re does that leave me please let me know please

1 reply

Dec 16, 2019

It's unfortunate, but not uncommon, for issues to arise when trying to get paid by insurance for a construction job. As you hint at above, there are ways to reduce risk - like including multiple parties on the insurance check. But, everything doesn't always go according to plan on that front. When an owner takes an insurance check intended for their contractor, that contractor will typically have a few different options for recovering payment. The point stands, though - a contractor is still entitled to payment, even if an owner intercepts a check and uses it for their own purposes. Naturally, though, it may be hard to recover that payment from an owner who's already spent it. We'll discuss a few payment recovery tools against an owner below, then briefly look at how a contractor might be able to force an insurer to release payments to the contractor who did the work.

How to recover payment on insurance-funded construction projects

Let's break it down category by category. Keep in mind that the ability to lien or threaten a lien may be affected if you've already submitted a waiver if that waiver was an unconditional lien waiver (as opposed to a conditional one). More about waivers here: - Unconditional Lien Waivers vs Conditional Lien Waivers - Should You Sign That Lien Waiver?

Threatening a mechanics lien

Mechanics liens are a powerful recovery tool, and that makes the mere threat of a lien claim powerful, too. Sending a document like a Notice of Intent to Lien to everyone involved in the project can be helpful. If the owner, mortgage company, and insurer are all aware that a lien claim may be filed, they may also be more willing to have serious payment talks or to finally make payment. More on that here: What Is a Notice of Intent to Lien and Should You Send One?

Demand letters

Payment demand letters can also be a powerful tool. In some situations, like when there are parties involved who don't own the project property, options outside of the mechanics lien process can be particularly effective. By sending a demand letter that threatens specific legal action, a contractor might be able to force payment from whoever was supposed to pay in the first place. More on demand letters here: Demand Letters for Contractors – How To Write One That Gets You Paid.

Filing a mechanics lien

Actually filing a mechanics lien can certainly get the job done, too. Mechanics liens will pose serious problems for property owners and mortgage companies (to some degree), though an insurer might not care all that much about a lien being filed. Still - if there's any hope that an owner might make payment, then pursuing a mechanics lien claim may be a strong option. Here are some resources that might be helpful on that front: - How Do Mechanics Liens Work? 17 Ways a Lien Gets You Paid - Waiting on Insurance Proceeds To Get Paid? Get Security With A Mechanics Lien

Legal claims against the property owner

Note that some legal claims might be available against an owner, even if their insurer was the party who actually executed the contract and was supposed to pay for the work. For instance - an unjust enrichment claim can be made even when there's no contract between the claimant and the party against whom the claim is made. To best understand the legal options available, it'd be helpful to consult a local construction attorney familiar with construction and insurance claims procedure.

Legal claims against the insurer

If a contractor has contracted directly with an insurer, then that contractor should have claims available against the insurer, too. It could certainly get hairy, and talking to a local attorney might help to unearth what claims might be available. But, the point stands that if an insurer improperly released payment directly to an owner, or if they otherwise have failed to make payment to the contractor, as promised, then the contractor should have some actionable claim against the insurer. But again - to determine what claims might be most appropriate on that front, it'd be wise to consult a local attorney.

Can an insurer hold onto payment while waiting on the dust to settle?

Finally, note that it's extremely predictable for an insurer to want to hold off on making payment until the dispute is totally resolved. At the same time, that doesn't mean the insurer isn't required to make payment, as promised. Unfortunately, since an insurer will have their own best interest in mind over their contractor, that means a contractor may need to make nonpayment the insurer's problem, too. Certainly, the party with the money has a lot of leverage - but that doesn't mean they can wield it however they like. But, unlike a property owner, it may be harder to force an insurer to pay what's owed - though the above options could all be helpful, to some degree or another. I hope this information has been helpful! Feel free to respond to this answer if you have additional questions.

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