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Is this criminal

I worked as the supervisor on multiple jobs to complete a residential basement. Hired by the homeowner builder. Completed and home owner paid the final check plus a bonus. I was out of my home state to work for the homeowner. I deposited check and packed up and drove back home. One week after I had deposited the check I was notified that the check had been returned and pulled from my account. Contacted homeowner and now claiming a bunch of things home owner unsatisfied with about the basement that he stopped payment. Is this legal or is this theft of services.

1 reply

Mar 23, 2020

An owner is not entitled to issue a chargeback through their bank and take payment back from their contractor for no reason. If there's a valid issue regarding payment or the quality of work, then a chargeback may make sense. But even then - it's poor form to chargeback without discussing the alleged issues first, at the very least. And, at the worst, it could constitute criminal liability - even fraud - on the part of the homeowner. Generally, when an owner disputes a charge with their bank, the party from whom the chargeback is taken will have a chance to dispute the chargeback. So, reaching out directly to their bank (or, potentially, to yours) may be a good first step. If the owner does successfully chargeback funds, then a contractor can resort to payment recovery tools.

Recovering payment after an owner has canceled funds

For one, sending a demand letter can force payment. Demand letters will include specific legal threats and give the owner a deadline for making payment. And, letting an owner know you're willing to do what it takes to get paid can force them to take your payment seriously. Taking things a step further with a Notice of Intent to Lien can force them to pay as well. Mechanics liens are an extremely powerful payment recovery tool - making the threat of a lien claim powerful, too. So, showing an owner that their consequences have actions by sending a Notice of Intent can go a long way toward getting paid. Plus, keep in mind that a Notice of Intent to Lien is a required part of the Colorado mechanics lien process. So, if you're considering filing a lien (more on that in a second), then a Notice of Intent will be required. Finally, if push comes to shove and an owner refuses to pay what's owed for the work, filing a mechanics lien could be an option for payment recovery. Mechanics liens are available as a recovery option even if there's a dispute about what's owed and even if there's a dispute over the project's workmanship.

Pursuing legal claims for improper chargebacks

As mentioned above, if an owner has performed a chargeback in bad faith, criminal penalties might potentially be on the table - though, I'll admit that's a bit outside my area of expertise. Other legal claims, like breach of contract, may be available too. But, to be sure what options make the most sense for your situation, it'd be wise to consult with a Colorado construction attorney. They'll be able to review your project documents, circumstances, and other relevant information then advise on how best to proceed in your particular situation.

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