Withholding Payment(s)

If you feel you need to withhold payment(s), it is important to make sure that you are careful to follow these steps:

• Carefully and thoroughly document the reason for non-payment.
• Issue a certified letter to the contractor.
• Give the contractor an opportunity (3 – 5 days minimum) to correct the problem.
• Refer to the contract documents to remind the contractor of the agreement.

You have to clearly tie the denial of payment to a violation in the contract documents or there may be no defense from liability.

Laws vary from state to state and in some cases, contractors can file lien, whether or not you had just cause. That does not make it automatic; they must follow a process similar to Construction – Don’t panic if your contractor tells you they are going to put a lien on your property. In this situation, it is important to try to work things out with the contractor before it escalates further.