When a contractor won't pay you, your most powerful legal tool is a mechanics lien — but only if you preserved your lien rights by serving a preliminary notice before the payment dispute started. Most states require subcontractors and suppliers to serve this notice within 20 days of first furnishing labor or materials (e.g., Cal. Civ. Code § 8200; Ariz. Rev. Stat. § 33-992.01; Fla. Stat. § 713.06). If you missed that window, you still have options: demand letters, prompt payment statute claims, bond claims on public jobs, and small claims court. But if your preliminary notice is intact, a filed mechanics lien forces the property owner into the dispute and dramatically increases your leverage to get paid fast.
What Should You Do Immediately When a Contractor Is Not Paying You?
Stop work and document everything before you make a single phone call. Pull together every signed contract, change order, daily log, text message, email, delivery receipt, and invoice — then organize it chronologically. This paper trail is your legal ammunition regardless of which collection path you take.
Next, confirm your preliminary notice status. Check whether you served a preliminary notice on the property owner, the general contractor, and the construction lender (if applicable) at the start of the job. If you did, you are in a strong position. If you did not, check your state's deadline — some states allow late service that still protects a portion of your claim.
Then send a formal written demand. This is not a strongly worded text. It is a dated letter on your letterhead that states the exact amount owed, the invoice numbers, the contract reference, and a hard deadline — typically 10 to 14 days — for payment before you escalate. Send it via USPS Certified Mail so you have proof of delivery.
According to Rabbet's 2024 Construction Payments Report, 82% of contractors face payment waits of over 30 days, up from 49% just two years earlier. You are not alone, and there is a defined process for getting paid.
How Does a Mechanics Lien Help When There's a Contractor Payment Dispute?
A mechanics lien is a legal claim recorded against the property title that prevents the owner from selling or refinancing until your debt is resolved. It pulls the property owner directly into your contractor payment dispute, even if your contract is only with the GC.
That leverage matters. Property owners pressure general contractors hard when a lien clouds their title. In most cases, a properly filed mechanics lien triggers payment negotiation within weeks — not months.
Here is how the process works in sequence:
- Serve your preliminary notice (at the start of the job, ideally — or as early as possible)
- Send a written payment demand after the invoice goes unpaid past its due date
- File the mechanics lien with the county recorder or clerk in the county where the project is located
- Enforce the lien by filing a lawsuit to foreclose if payment still does not come
Each state sets its own deadlines for filing. In California, most subcontractors must file within 90 days of project completion (Cal. Civ. Code § 8412). In Florida, the deadline is 90 days from last furnishing (Fla. Stat. § 713.08(5)). In Arizona, it is 120 days from project completion (Ariz. Rev. Stat. § 33-993). Missing these deadlines kills your lien rights permanently.
Use the lien deadline calculator to find your exact filing deadline based on your state and first-furnishing date.
What Are Your Options If You Did Not File a Preliminary Notice?
Missing a preliminary notice deadline is painful, but it does not mean you have no options — it means your strongest option (the mechanics lien) may be partially or fully off the table.
Here is what you can still pursue:
Written demand letter. A formal demand citing your contract, the outstanding balance, and a payment deadline costs nothing and resolves a surprising number of disputes before they escalate. Many GCs pay when they realize you are serious and organized.
Prompt payment statute claims. Most states have laws that penalize GCs and owners for late payment. In Florida, Fla. Stat. § 255.073 (public contracts) and Fla. Stat. § 715.12 (private contracts) entitle subcontractors to interest on unpaid amounts — typically 1% per month — plus attorney's fees in some cases. California's Prompt Payment Act (Cal. Bus. & Prof. Code § 7108.5) requires GCs to pay subcontractors within seven days of receiving owner payment. Texas has similar provisions under Tex. Prop. Code § 28.001 et seq.
Payment bond claims. On federally funded projects, the Miller Act (40 U.S.C. § 3131) requires GCs to post a payment bond, and you can make a direct claim against that bond even without a lien. Most states have "Little Miller Act" equivalents for state public works.
Small claims court. For unpaid invoices under your state's small claims limit (typically $5,000–$25,000 depending on the state), this is fast, cheap, and does not require an attorney.
Collections attorney or arbitration. If the amount is significant and your contract includes an arbitration clause, that process is often faster and cheaper than full litigation.
What Does a Proper Payment Demand Letter Include?
A demand letter that gets results is specific, professional, and unambiguous about consequences. Generic complaints get ignored. Here is what yours must include:
- Your full legal business name and license number
- The property address and project name
- The contract date and contract amount
- Each unpaid invoice number, date, and amount
- The total amount currently owed
- A specific payment deadline (10–14 days is standard)
- A clear statement of what you will do next — file a mechanics lien, pursue bond claim, initiate legal action — if payment is not received by that date
- Your signature, the date, and your contact information
Send it certified mail and keep the tracking number. If this goes to court later, that mailing receipt matters.
Do not apologize in the letter. Do not leave the deadline vague. Do not say "we hope to resolve this." State the facts and state the consequences.
What Is a Retainage Dispute and How Do You Collect It?
Retainage is the percentage — typically 5% to 10% — that GCs withhold from subcontractor payments until project completion. It is one of the most common unpaid contractor invoice disputes in the industry.
Most states regulate how long retainage can be held after substantial completion. In Florida, retainage on private projects must be released within 14 days of receiving final payment from the owner, under Fla. Stat. § 715.12. In California, retainage on public works must be released within 60 days of final acceptance (Cal. Pub. Cont. Code § 7107). In Washington, retainage on public projects must be released within 60 days of contract acceptance (RCW § 60.28.011).
If a GC is holding retainage beyond the legally required period, that is a separate violation from the original payment dispute — and it may entitle you to interest and penalties on top of the withheld amount.
Your demand letter for retainage should specifically cite the applicable statute and calculate interest from the date the retainage legally became due.
What Happens If You File a Mechanics Lien and the GC Still Won't Pay?
Filing the lien is not the end of the process — it is the beginning of the enforcement phase. Once the lien is recorded, you typically have a limited window to enforce it by filing a lawsuit to foreclose before the lien expires.
In California, you have 90 days from the date of recording to file the foreclosure action (Cal. Civ. Code § 8460). In Florida, the deadline is one year from the date of recording (Fla. Stat. § 713.22). In Arizona, it is six months (Ariz. Rev. Stat. § 33-998).
In practice, most construction payment disputes resolve before foreclosure. The recorded lien creates enough title pressure on the property owner that they intervene, push the GC to pay, or negotiate a release directly with you. Attorneys who handle construction disputes estimate the majority of mechanics liens settle before trial — exact rates vary by market, but the lien filing itself is typically the turning point.
If the project is already complete and the property has sold, you may still have a claim against the bond or escrow proceeds, depending on your state's rules and when your lien was recorded relative to closing.
How Do Prompt Payment Laws Protect Subcontractors?
Prompt payment laws give subcontractors a statutory right to interest and sometimes attorney's fees when a GC or owner pays late — separate from your lien rights. These laws exist at the federal level and in most states.
Under the federal Prompt Payment Act (31 U.S.C. § 3901 et seq.), prime contractors on federal jobs must pay subcontractors within seven days of receiving payment from the government. Failure triggers automatic interest penalties.
At the state level, the specifics vary, but the core mechanism is the same: if you did the work, submitted a proper invoice, and the GC received payment from the owner but didn't pass it down to you within the statutory period, they owe you interest. In California, that interest is 2% per month on private projects under Cal. Bus. & Prof. Code § 7108.5. In Texas, it is 1.5% per month under Tex. Prop. Code § 28.004.
Document when you submitted each invoice and when the GC received owner payment. That evidence is what turns a prompt payment claim from theoretical to collectable.
Check your state's specific deadlines and requirements at lien deadline directory.
Should You Hire an Attorney for a Construction Payment Problem?
Hire an attorney when the amount owed justifies the cost, when the GC is well-capitalized and likely to fight, or when you are approaching a lien enforcement deadline and have not been paid.
For unpaid invoices under $10,000, a mechanics lien filed yourself (or through a service like LienFlash) plus a formal demand letter often resolves the dispute without legal fees. For amounts above $25,000–$50,000, the math typically favors bringing in a construction attorney — especially if there are bond claims, public contract issues, or multiple parties involved.
Be aware that many construction attorneys work on contingency for clear-cut nonpayment cases, meaning their fee comes out of the recovery. Get that in writing upfront.
Before you spend money on an attorney, make sure your documentation is airtight: signed contract, change orders, delivery records, invoices, proof of preliminary notice service, and all correspondence with the GC. Walking into a lawyer's office organized cuts your billable time significantly.
The best time to think about attorney involvement is before you file the lien — not after — so they can advise on enforcement strategy from the start.
According to Rabbet's 2024 Construction Payments Report, slow payments cost the U.S. construction industry an estimated $280 billion in 2024, adding roughly 14% to total construction spending. That cost flows downhill — and subcontractors absorb most of it. Protecting your payment rights proactively is not optional; it is how you stay in business.
Frequently Asked Questions
What do I do if a contractor refuses to pay my invoice?
Send a formal written demand letter via certified mail stating the exact amount owed, invoice numbers, and a hard payment deadline of 10–14 days. If you served a preliminary notice at the start of the job, follow that with a mechanics lien filing at the county recorder's office. If you did not serve a preliminary notice, pursue prompt payment statute claims, bond claims (on public jobs), or small claims court depending on the amount.
How long do I have to file a mechanics lien after I stop getting paid?
It depends on your state. The clock typically runs from project completion or your last date of furnishing labor or materials — not from when the dispute started. Common deadlines: 90 days in California (Cal. Civ. Code § 8412), 90 days in Florida (Fla. Stat. § 713.08), 120 days in Arizona (Ariz. Rev. Stat. § 33-993). Missing this deadline permanently waives your lien rights, so check your exact state deadline immediately.
Can I file a mechanics lien if I don't have a written contract?
In most states, yes — a written contract is not required to file a mechanics lien. What matters is that you furnished labor or materials to the project and were not paid. Verbal agreements and purchase orders can support a lien claim. However, a written contract significantly strengthens your position if the lien is disputed or goes to enforcement.
What is a preliminary notice and why does it matter for getting paid?
A preliminary notice (sometimes called a "Notice to Owner" or "Notice of Right to Lien" depending on the state) is a document served at the start of a project that preserves your right to file a mechanics lien if you are not paid. Most states require it. Without it, you may lose the right to lien the property entirely. Serving it does not mean you are filing a lien — it just keeps your options open.
Can I put a lien on a property if the GC, not the owner, owes me money?
Yes. That is exactly how mechanics liens work. Even if your contract is with the general contractor, a properly filed mechanics lien attaches to the property itself. The property owner becomes a party to your payment dispute because their asset is encumbered. This is why mechanics liens are the most powerful collection tool in construction — they reach past the GC to the property owner who ultimately controls the asset.
What happens if the GC files for bankruptcy while owing me money?
Bankruptcy complicates collection. If you have a recorded mechanics lien filed before the bankruptcy petition, you may have a secured claim that survives the bankruptcy proceeding — giving you priority over unsecured creditors. If you have no lien, you become an unsecured creditor, which typically means recovering cents on the dollar, if anything. This is one of the strongest arguments for filing a preliminary notice and, when necessary, a mechanics lien quickly rather than waiting.
Can I charge interest on a late construction payment?
Yes, in most states, if your contract includes an interest clause — or if the state's prompt payment statute applies. Typical statutory rates range from 1% to 2% per month. In California, Cal. Bus. & Prof. Code § 7108.5 entitles subcontractors to interest on late payments. In Florida, Fla. Stat. § 715.12 provides similar protections. Include the interest calculation in your demand letter and any lien amount where applicable.
How much does it cost to file a mechanics lien?
County recording fees for a mechanics lien vary by state and county, typically ranging from $15 to $100. If you use a service to prepare and mail the notice, add that cost. LienFlash charges $24.99 for a single preliminary notice, which includes attorney-reviewed form generation and USPS Certified Mail delivery — completing the process in about 2 minutes. Attorney-prepared liens run significantly higher, often $300–$1,000+ depending on complexity.
Protect Your Lien Rights Today
The single most important step you can take to protect yourself when a contractor won't pay is to serve your preliminary notice at the start of every job — before a dispute ever starts. Once a payment problem hits, it is too late to go back and serve that notice retroactively for work already done.
Use the lien deadline calculator to find out exactly how much time you have left on your current jobs. If you are ready to file, LienFlash gets your preliminary notice prepared, attorney-reviewed, and sent via USPS Certified Mail in about two minutes for $24.99. No chasing a notary. No printing. No guessing whether you used the right form.
Your labor built something real. You deserve to get paid for it.