Legal Question in Construction Law in Florida

Did my bank incorrectly issue draws?

I have a construction loan with my bank and I have an unresponsive builder who has left me with an incomplete house. The builder's corporation will likely file bankruptcy and it is likely that I have no recourse with the builder since he will have limited liability since he is incorporated.

My builder was incorporated at the time of signing of our contract, however, his corporation was ''dissolved'' due to failure to respond to a bounced check that was written by the corporation. His corporation was then ''reinstated'' 3 months later after meeting the requirements set by the FL dept. of state. What concerns me is that a draw was issued by my bank to the corporation during the time in which it was dissolved. Does this mean that the bank incorrectly issued a draw, since a ''dissolved'' corporation is one that is non-existant? Do I have any recourse for incorrect issuance a draw?


Asked on 7/24/04, 12:20 am

2 Answers from Attorneys
Randall Gilbert Gilbert & Caddy P.A.

Re: Did my bank incorrectly issue draws?

There are insufficient facts, however, as of July 1, 2004, the Construction Industry Recovery Fund was amended from $25,000.00 to now allow "qualified" Homeowners to recover up to $50,000.00 from a state licenesed contractor. Therefore, you may have some peace of mind there. As to the bank, an attorney would really need to review your loan agreement, and the specific facts of your case. Should you need additional help, feel free to contact the undersigned, or another local attorney which practice construction litigation.

Yours truly,

Randall Gilbert

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Answered on 7/24/04, 10:25 am
Tonia Troutwine, Esquire - Troutwine Law Group. LLC

Re: Did my bank incorrectly issue draws?

If the property met inspection and there were inspection requirements in your loan agreement then no. Also, you should have signed off on the draw, unless your agreement states otherwise. If this bank recommended this contractor they may have some liability. However, business owners cannot use a corporate entity as a means of defrauding creditors or other individuals. It may be possible depending on the specific facts of your case to "pierce the corporate veil" and attach personal liability to this contractor, wherever he is.

Tonia Troutwine, Esquire 305-984-5748

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Answered on 7/24/04, 11:29 am


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