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As a Subcontractor, how long do I have to wait to receive a progress billing payment ?

I am a Subcontractor on a large project who is still waiting to receive payment from the General Contractor for a draw in December. How long do I have to wait to receive a progress payment. My emails to them go unanswered. Also, how does a Subcontractor find out if a General Contractor has been paid by an owner to make sure the Subcontractor is getting paid on time and the General Contractor is not delaying releasing payment?

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Mar 17, 2020

Timing for payments is highly dependent on the terms of your contract. So, the timeframes set by your contract should generally be followed. If your contract is silent about when progress payments should be made, then the timeframes established by the California prompt payment laws will apply. California's prompt payment laws state that progress payments to a subcontractor must be released within 7 days of the customer being paid. So, a subcontractor hired by a GC must be paid within 7 days of when the GC gets paid. In either event - if payments aren't being made during the time that the contract or prompt payment laws require, then the GC will be subject to prompt payment or contractual interest penalties. Granted, it's hard to know when, exactly, your customer gets paid. Asking them could be a good start. Or, if they are dodgy about whether or not they've been paid, then going over the GC's head to ask the owner might either help to determine if payment was made, or it might at least tip off the owner and let them know there's a payment problem.

How to force a customer to take your invoice seriously

There are a number of different ways to force a contractor to respect your invoice. Let's go through a few different options. Additionally, I think this resource might be valuable here: Why Does it Take So Long to Get Paid in Construction? And What Can I Do About It?

Invoice reminders

The simplest tool for getting a contractor's attention is to send formal invoice reminders on a regular basis. An invoice reminder is just that - it's a reminder. It doesn't rise to the level of a threat or a claim, but it is more than just an email, call, or text.

Demand letters

Sending a payment demand letter is more than just a reminder. A demand letter will strongly demand that payment must be made, and it will generally include legal threats and a deadline for making payment. Obviously, things can get contentious when demands are being made - but sometimes, that's necessary.

Notice of Intent to Lien

Sending a Notice of Intent to Lien for unpaid amounts will get the owner and the GC's attention. Mechanics liens are extremely powerful, which makes the threat of a lien claim powerful, too. So, sending a Notice of Intent to the GC who's not taking the matter seriously and sending it to the owner as well can make sure that all parties are aware of the payment issue in order to move the ball forward on getting paid. More on how a Notice of Intent can force payment, here: What Is a Notice of Intent to Lien and Should You Send One?

Filing a mechanics lien can force a customer's hand

Mechanics liens are the nuclear option, and it's usually a good idea to take some (or all) of the above steps before pursuing a lien claim. Plus, California subs must be careful about stopping work before filing a lien. But, if push comes to shove, filing a mechanics lien claim is a strong way to force a customer to pay you what you're owed. When a lien is filed, that payment dispute becomes the problem of both the GC and the property owner. And, because of the damage a mechanics lien can cause, an owner can't afford to ignore the payment issue - which means their GC can't either. For more background on how mechanics liens force payment, as well as how to pursue a California mechanics lien claim, the articles below should be really helpful. - How Do Mechanics Liens Work? 17 Ways a Lien Gets You Paid - California Mechanics Lien Guide and FAQs - How to File A California Mechanics Lien – Step By Step Guide To Get You Paid

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