What Should Subcontractors Do When a General Contractor Does Not Pay Them
- Credit App
- 4 hours ago
- 3 min read
When a general contractor does not pay you, it can feel like hitting a wall in the middle of a project. Subcontractors and suppliers depend on timely payments to keep their businesses running smoothly. Unfortunately, payment delays or outright non-payment from general contractors happen more often than many expect. If you find yourself in this situation, knowing your options and the right steps to take can protect your business and help you recover what you are owed.
Understand Why the General Contractor Did Not Pay You
Before taking action, it’s important to understand why the payment was missed. Sometimes, delays happen due to administrative errors, cash flow problems on the GC’s side, or disputes over work quality or contract terms. Clear communication can often resolve these issues quickly.
Contact the general contractor directly to ask for payment status.
Review your contract to confirm payment terms and deadlines.
Check if you submitted all required paperwork, such as lien waivers or invoices.
Knowing the reason behind the delay helps you decide the best course of action and shows professionalism when you follow up.
Document Everything Related to Your Work and Payment
If the general contractor did not paid you, having solid documentation is crucial. Keep detailed records of:
Contracts and change orders
Invoices and payment requests
Correspondence (emails, texts, letters)
Work completion reports and inspections
Delivery receipts for materials supplied
This documentation supports your claim and can be essential if you need to escalate the issue legally or through mediation.
Use Payment Bonds and Lien Rights to Your Advantage
Many construction projects require payment bonds from the general contractor. These bonds guarantee payment to subcontractors and suppliers if the GC fails to pay you.
Check if the project has a payment bond.
File a claim against the bond if the GC does not pay within the contract terms.
Additionally, subcontractors often have the right to file a mechanic’s lien on the property. This legal claim can pressure the general contractors or property owner to settle outstanding payments.
Understand lien deadlines and filing procedures in your state.
File a lien promptly if payment is overdue and negotiations fail.
These tools provide legal leverage to recover unpaid amounts.
Seek Mediation or Arbitration Before Going to Court
Going straight to court can be costly and time-consuming. Many contracts include clauses requiring mediation or arbitration to resolve payment disputes.
Propose mediation to the general contractor as a first step.
Use a neutral third party to facilitate a fair discussion.
If mediation fails, move to arbitration if your contract allows.
These alternative dispute resolution methods often lead to faster settlements and preserve business relationships.
Consider Legal Action as a Last Resort
If all other options fail, legal action may be necessary. Consult a construction attorney who understands subcontractor rights and construction law.
File a lawsuit for breach of contract or non-payment.
Use your documentation and lien claims as evidence.
Be prepared for the time and expense involved.
Legal action can recover funds but should be weighed against potential costs and business impact.
Prevent Future Payment Issues with Credit Checks and Contracts
The best defense is prevention. Many subcontractors face payment problems because they don’t vet general contractors before starting work.
Use tools to check the financial health of general contractors.
Verify credit scores, payment history, and bonding capacity.
Negotiate clear payment terms and milestones in your contracts.
Include clauses for late payments, interest, and dispute resolution.
Taking these steps reduces the risk of encountering a general contractor who did not pay me.
Build Strong Relationships and Communicate Regularly
Maintaining open communication with general contractors throughout the project helps identify payment issues early.
Provide regular progress updates.
Submit invoices promptly and follow up professionally.
Address concerns before they escalate.
Strong relationships can encourage timely payments and smoother project completion.
When a general contractor doesn't pay you, the situation can feel overwhelming. Yet, subcontractors have several practical options: understanding the cause, documenting thoroughly, using legal tools like bonds and liens, seeking mediation, and if necessary, pursuing legal action. Prevention through credit checks and clear contracts also plays a key role in avoiding these problems.
If you are currently facing non-payment, start by reviewing your contract and gathering all documentation. Reach out to the general contractor to clarify the situation. If you need help assessing the financial stability of a GC before starting work, consider using The Credit App to make informed decisions and protect your business.
