Contractor dies after putting a deposit down for work

[Andy Rousch]

So I purchased a rental property which needed some foundation work. In the sale agreement the seller gave the contractor a check to start work on the foundation after closing. The contractor had a stroke and passed away before starting the work or ordering material. Of course I will go to the family for a refund (and will feel like an *** asking for one at this time but business is business) but if the money has already been spent any idea what happens then? do I just take the loss as the sole proprietor of the contracting company has passed? Although it sucks this is a new lesson to be learned in the books for me! any advice is appreciated!

[Andrew B.]

I imagine the correct way to get the money back, if its spent or the heirs refuse, is to sue the estate similar to any other debtor. Whether you can recover or not, is another story.

The only thing making this trickier, is the money did not come directly from you. You may want to consult an attorney if it gets sticky.