You might want to check with the financial institution that wrote her AND YOU the check. In some cases the bank considers who is doing the work, their reputation, and quality when figuring the completed value of the project. Obviously, the upgraded window has a huge commission included in the price that will not contribute to the appraised value of the property. Whoever wrote the check in both names, did it for a reason.
Personally, I would not endorse a check like that so the homeowner can have the funds. The loan was made based on certain improvements to the property by YOU, if she takes the money to Vegas and stiffs you, how will you get paid. Maybe a call to your attorney is not a bad idea.
I thought this smelled familiar. This age demographic often does not value anything more than the bottom line. This issue is a red flag and a sign of things to come.yes, that is about her age range, late 20's-early 30's. To much HGTV.
You will most likely get a 1099 for the full amount of the check made out to you and the home owner, the reason the check is made out to the contractor and the HO is to make sure the work is done by the contractor the HO has a contract with.I have a 203k job that has finally closed, and we are ready to proceed.
But things are not looking good.
First the HO got a draw check for 50% ( I put in a draw for 25% at closing).
The check is made out to her and my company, she says she was told by the mortgage company to deposit it in her account, give me my deposit, then pay me as we progress. Ok no big deal, as long as I get paid as we progress, and I get my deposit.
Now she calls tonight, and says she wants to use another contractor to replace the windows. Some window salesman is there with her now. He will take what I allotted for windows, and finance her the difference.
Now a little background, when I spec'd the windows budget was a huge concern, so we went with Harvey slimeline replacements.(low end).
I have a bad feeling about this window switch, and quite honestly since the closing I have gotten a bad feeling about the HO. Seems like she said/did what she had to to get this through, and now she thinks she's Miss GC.
I do not think I am going to allow the window switch. And am wondering if it is possible for me to get out of the whole deal.
Anyone ever gotten out of a 203k?
We have not started anything on this job to date.
I wouldn't start playing games with the government loans, they loaned money based on the contract, you start altering the contract, you are looking for problems.I talked to her this morning.
She says she doesn't want to use the other contractor for windows, but she does want to find a contractor to finance her windows, so "we" can use the window money to do other things.
We started demo today(it was raining like hell), and discovered a roof leak.
The first time i was there it was raining heavy to, but no leaks.
She is kind of freaking out now about her roof. We have a meeting planned for Sat. morning to decide what "we" are going to do.
We'll see. She seems to be finally showing her cards, and telling me what her true plans are, but like someone above said, the funds are designated for the work scoped in the contract.
But most of that work can't be done until this roof is addressed.
I am entirely sure of my scope, and how and when I get paid. Trouble is the HO wants to play the shell game with the $.A lot of good advice above, especially the part of not messing with government contracts. If you're not entirely clear on the scope of your responsibility and your rights as well as your obligations invest a little money and talk with a competent construction law attorney, preferably one who is experienced with 203K loans.