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Get to know the 5 top reasons why Escrow / Funds Control is a great option for contractors:
- Escrow can help to mitigate or prevent claims against the Contractor's payment bond, reducing the risk of excessive legal costs and a loss of the ability to receive additional bonding while claims are unresolved.
- The Escrow provides a review of the Contractors payment procedures and insures that the proper project documentation is maintained in the event of a dispute arising between the Owner and the Contractor (undocumented Change Orders, Back Charges...etc), or between the Contractor and his vendors.
- The Escrow will track the contract funds to insure that all said funds are applied to project costs and not co-mingled with funds from other projects.
- The Escrow will provide project specific and invoice specific lien waivers with each vendor payment, thereby insuring that a vendor providing materials or labor to the Contractor on multiple projects on an open account cannot apply a balance from a different project to perfect a claim on the bonded project.
- In the event of a dispute between the Contractor and a vendor, the fact that the disputed funds are being held in escrow will often enhance the possibility of a swift resolution, and may be required by statute.