Construction in Florida and the United States in general, is at an all-time high.Â As a result, non-payment by Contractors is a common problem for subcontractors who are depending on prompt payment for work completed.Â Non-payment or even late payment has made it increasingly more difficult for small companies to stay in business.
What can a subcontractor or supplier do to protect themselves from non-payment by a contractor?
- They can prequalify their potential contractors
- They can have an attorney review the contract in advance to ensure they are not carrying the burden of non-payment
- They can send a timely preliminary Notice to the owner of the project informing them that they have been hired for the job
- They can document the work they are doing for the contractor on a daily basis
- They can invoice the contractor with the specifics of the work completed
- They can send payment reminders when they have not been paid
- They can send a notice of intent to lien the property when they have not been paid
- They can file a mechanics lien against the property
- They can file a lawsuit for breach of contract
Contractors may hold back payment for a number of reasons. One of the most common reasons is the contractor is not being paid by the owner or subcontractor themselves. The contract between the parties should be very clear as to whether payment can be withheld due to non-payment to the contractor. Another common reason is workmanship problems. The contractor may withhold payment until the issue is resolved, even if Itâ€™s not the subcontractorâ€™s fault.
Having an attorney evaluate the situation can be very effective.Â Often, sending a simple demand letter to inform the Contractor that you are expecting payment will bring the non-payment to the attention of the Contractor.Â If there is a dispute as to what is owed, the parties may have to negotiate what is owed to get resolution and payment.Â Filing a lawsuit, should be a last resort.Â Litigation can be costly and the cost could easily outweigh the benefit.
An experienced attorney can help you recover your payment and help prevent non-payment in the future.