Home>Levelset Community>Legal Help>Owner won't release funds to cover 2nd deposit. How can we get the owner to comply?

Owner won't release funds to cover 2nd deposit. How can we get the owner to comply?

Hi, Our company is a supplier of Italian kitchen cabinets. We are currently involved in a dispute with a project owner. In spite of amount due contractually and all charges justified, owner will not release all of 2nd deposit to ship cabinets from Italy. Owner is refusing to pay redraw fees of approx. $7500. Owner approved the redraw with fee via email. The cabinets are ready to ship and owner has been notified. Owner said "the cabinets can just sit there". Owner will not respond to contacts. We believe the owner is trying to force us to ship by putting undue pressure on our relationship with our manufacturer.

1 reply

May 15, 2020

Forcing an owner to pay for work that's already been performed is easier than forcing an owner to approve draws. But, there may be some options available for forcing an owner to move forward with the job. For one, if the owner has failed to pay for any services or supplies already provided, then mechanics lien rights could be on the table. And, threatening to file a mechanics lien (with a Notice of Intent to Lien) could force an owner to move forward with the project. If threats of lien don't work, and if labor or materials have been supplied which permanently improved the project property, then a mechanics lien filing could be appropriate. If no work has been done and if the materials haven't actually been supplied yet, though - then lien rights may not be on the table. Regardless of any lien rights - an owner can't just opt to go against the contract. And, failure to make payment, acting in bad faith, and holding up the project may well result in a breach of the contract. So, threatening to make legal claims - like with a payment demand letter - could be useful for getting their attention, too. Or, actually pursuing those claims via litigation or in small claims court could be an option, too. Finally, if the owner won't budge after lien threats or legal threats are made, a good next step may be to consult with a local California construction attorney. They'll be able to review your contract then advise on the best options for going forward. And, after having eyes on the contract and communications, chances are they'll have a more targetted approach for how to attack the situation.

0 people found this helpful

Helpful