Question On House Being Built
Sorry if this isnt the right forum. I have a contractor building a house for me and he has turned out to be a little shady. The house is almost done but I have not purchased it yet, just gave him some money down. I was over there yesterday and one of the subconractors stopped over looking for the builder who was not there. The sub said the builder hasnt paid him for work he did in october. Now my builder told me he had it worked out with all his subs that they would get paid when the I buy the house and he gets his money. This may be true but what if he doesnt pay them? The sub said he could put lien on the house and it could affect me?? Yikes. Now my builder will say, " I will get lient waivers for you". But he wont get them until after closing when he pays everyone. If he decides to not pay someone, I am on the hook right? How can I get lien waivers for everyone if they wont be paid until I own the house?
Establish an escrow at the title company doing the closing, pay contractors out of that escrow. Make them present final waivers to get paid. Make sure that the General contractor gets paid the last of his money only after the lien filling period has expired. Get title insurance over all outstanding mechanics liens.