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Payment dispute -- can I place the amount in escrow?

WashingtonPayment Disputes

My GC has given me a change order (about $5k) which I believe is not justified and is actually contrary to the specifics outlined in the contract. If I refuse to pay this CO, the GC is likely to walk off the job; much work still remains and it's not in my interest for him to walk off the job at this point. I have abided to all my obligations and have paid promptly in the past. Can I unilaterally place the amount in escrow, or does the GC also have to approve the escrow option? What is the process for informing him of escrow? If it does go into escrow, when would we eventually address this and what are methods to resolve the dispute -- arbitration? small claims court? hold back from final payment? mutual agreement? other? I'm thinking of a real estate settlement company to hold the escrow? Grateful for your suggestions.

3 replies

Feb 2, 2021
$5K is not that much (I do not know what your total contract is). Pay it under protest. You can pen that into the CO when you sign it. It is not enough to warrant escrow. You do not want there to be a false issue for the contractor to walk. You can challenge it later when final payment comes due.
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Feb 7, 2021
If you can get the GC to place it in escrow then good luck. If you do not need the extra work done in the change order, then simply say you don't want it. If it's already part of the contract work, but the GC did not anticipate it, then the contract language controls. It's always best to have a meeting with the GC to hash out any differences as you will continue to have to work with each other.
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Feb 7, 2021
If the general agrees, you can put it into escrow. If there is a dispute later on, the agreement should specify how it is resolved. It can be through any of the methods you suggested.
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