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Should I hold onto my money until Inspection or pay him now and will a lien affect my good credit?

Wyoming

A contractor, Pete Weisbeck, built a house for me. He insisted on vinyl siding. I chose a siding with an excellent rating, (thicker, good reviews) from Menards. The home was built in a rural setting, 3 miles from town on 6.9 acres. The contractor began putting on the siding on the North side approx. July 1, 2020, continuing around the house, ending approx. July 31, 2020, on the West side. As he was putting the West side pieces on, the siding began buckling on the lap ends. The buckling has gotten worse, and has involved the South side as well. In August, I asked Pete about the siding because he had not said anything to me about the buckling. He noted that he had not done anything wrong. He wanted to wait until winter to see if it would straighten up. He completed the house sometime in mid September 2020. I have a contract with a payment schedule which was paid religiously except for the last draw which I withheld because the siding is unacceptable. HIs cost to build the house was $163,977.00 and the last draw is $7911.98. I read the Warranty which had a time limit and contacted the siding Warranty Company in Vermont and mailed all documents and samples of the siding. They are "unable to make a disposition on my claim" and are sending an Inspector. The Inspector cannot come until the week of March 8, 2021. In the meantime, Pete sent me, by e-mail, an Intent to file Lien per Levelset on January 25, 2021. He has given me 20 days to pay the last draw or he will file the lien at the court house. He has not offered to help me resolve the siding issue, says he did nothing wrong, and wants his money. He is not willing to wait for the Inspector's review and decision.

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