Contractor Needs to Get Paid

[Brianna H.]

Howdy!

Does anyone have any experience with a renovation loan? My contractor completed the work, but the bank is stalling the final payment. They want to see a certificate of occupancy, which I am told only applies for commercial property. They want to see license and workers comp records and remodeling permits. They also want to see a detailed invoice for the work. 

They have already gotten 2 inspectors out there to look at the finished work, so I don't understand why they are dragging their feet? The contractor wants to get his lawyer involved, which I hope wouldn't affect me because they signed the contract with the bank, but this is definitely not good for me in the future. 

I'm just wondering if anyone else has dealt with this. Is there anything I can do or should I just tell my contractor to suck it up and get these documents together?

[Jon Holdman]

Contact the building department that has jurisdiction over the property and ask them if a CO comes into play.  I assume there were permits for the work, right?  Shouldn't be anyone "under any impressions".  The process for getting the final sign off on the permits should be straightforward.  And inspections are done by city inspectors.

I've done a hard money loan where the borrower had permits for some, but not all, of the work they did.  They got caught, and ended up giving us the house back, deed in lieu.  We pulled the required permits, finished the work, and sold the house.  If was a money loser for me and my partner, but a BIG money loser for the rehabber.  I'm much more sensitive to work being done without proper permits.  I suspect your lender is, too, and wants to be sure all the work was done by licensed, insured contractors working under permits.  Hopefully that's the case.

And I lived for many years in the 80's and 90's in Rosenberg, not far from where you are now.  Weird, eh?