Is it legal for the home builder to hold our checks?

I am a plumbing contractor and we had a
homeowner have a leak that caused some
damage.we contacted our insurance which is
one of the biggest in commercial insurance
they sent an adjuster and he seen red flags
all over this claim so the homeowner is under
investigation.the builder is holding our
checks which is for alot of money we do aslot
of work .is this legal because we called our
insurance and if they find evidence that its
not on us they shouldnt be able to use the
money they owe us to pay this jomeowners
outrageous claim

Asked on March 26, 2018 under Business Law, Colorado


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

Arguably, they could hold any payments relating to work done in *this* home IF there is reason to think the work was done deficiently or negligently and caused the damage: they do not have to pay for deficient, negligent, etc. work. If you disagree, you could sue them for the money and they'd have to prove the problems with the work to possibly have grounds in court to not pay.
They  have *no* legal basis to withhold checks for any other work you did where is no dispute about that specific work, and you could sue them for the money for any other work or projects. The only grounds to withhold payment from a contractor is problems with the work or doing unauthorizing or incorrect (i.e. not what was ordered to be done).

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