We are a sub-contractor. We received an endorsedjointcheck from the general contractor. The title company made the check to both parties. This is normal in most of our jobs, however due to the amount of the check, our bank refused to allow us to deposit it. They requested the bank of the general contractor to supply a stamped letter of guarantee. We have been in business for fourteen years and this is the first time I am hearing of this. Please help me understand.
Your bank is simply being cautious. The bank isn't questioning you, it is trying to be certain that the endorsement of the general contractor is both genuine and authorized. If for some reason that endorsement would be challenged, your bank (and your company) could be at risk for having to pay a claim for reimbursement for as long as three years from now.
If the general contractor obtained your endorsement and deposited the check to its account, its bank would endorse the check, guaranteeing the endorsements. Your bank is simply trying to obtain that guarantee in another way.
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Your bank is simply being cautious. The bank isn't questioning you, it is trying to be certain that the endorsement of the general contractor is both genuine and authorized. If for some reason that endorsement would be challenged, your bank (and your company) could be at risk for having to pay a claim for reimbursement for as long as three years from now.