Payment Dispute Attorneys

Slow / Nonpayment Of Construction Draws

Slow payment or nonpayment of construction draws is one of the most common bases for disputes in the construction industry. Payment is the lifeblood of contractors and subcontractors, and lack of funds can lead to business disasters. Many times, the domino effect of slow payment can cause other projects to be impacted as well.

When payment of construction draws is slowed or not paid at all, contractors and subcontractors may run out of funding necessary to complete their part of the project. This can bring the entire project to a halt, causing even more issues to resolve. There can be many reasons why draw payments are slowed or not performed, such as insufficient funds or the draw inspector finds on-site discrepancies between the draw request and completed work.

Lien claims and bond claims only lead to worse results for the contractor and can limit bonding capacity and claims under the indemnity agreement once the surety gets involved.

The contracts should be drafted to adequately deal with disputes in a reasonable and prompt manner. Contact the construction attorneys in Gainesville with Warner, Sechrest & Butts, P.A. to review a contract before entering into a legally binding agreement.

Construction Draw Requests

Payment for construction projects is done in stages or draw requests. As a designated part of construction reaches completion, the contractor submits a draw request to the lender. Each draw request is a document detailing the change orders, invoices, lien releases, and receipts related to that stage of construction. If there is an issue with a draw request, the lender has the ability to postpone or deny the request.

Determining A Draw Schedule

Draw schedules are used by the lending institution to release funds to contractors and subcontractors at predetermined stages of completed construction or milestones. These stages are generally divided into a percentage of completion, such as 20 percent for 5 draws total. Some projects use a periodic schedule, such as monthly for a specific number of months with a final draw. However, your draw schedule may vary based on local requirements and the agreement with the lending institution.

Factors Affecting Construction Draws

Generally, construction draws are made based on a predetermined payment schedule. Yet, each draw may be affected by several factors such as change orders and lien waivers. If you have questions about construction draws for your project, contact a Gainesville construction attorney with Warner, Sechrest & Butts, P.A.

Final Payment Conflict

Final payment conflicts can develop for a number of reasons, including newly discovered structural defects. Because the involved parties want to receive payment, if a final payment conflict arises, contact a board-certified construction lawyer in Gainesville with Warner, Sechrest & Butts, P.A.

Change Orders

Before contracting with a specific bank or financial institution, make sure payments will be made for change orders. Some banks do not cover draws for change orders which can bring work on a project to a halt unless alternate funding is provided.

Lien Waivers

Banks and financial institutions generally require lien waivers to be signed and submitted before issuing a final payment draw. Depending on the size of the project, a lien waiver may be required by the lender before each scheduled draw is made.

 

Contact A Construction Attorney Today

At Warner, Sechrest & Butts, P.A., our Gainesville construction lawyers use their vast experience to mitigate payment legal issues. Our firm handles all aspects of payment disputes, lien and surety issues, including surety subrogation/salvage, contract review and drafting, nonpayment claims, lien claims, bond claims, GIA disputes, delay & impact claims, defective work claims, surety and owner defense, and construction business formation and licensing issues. To schedule a consultation, contact Warner, Sechrest & Butts, P.A. today.