The problem gets harder with every week you wait
Non-payment rarely announces itself. A payment application is "under review," a check is promised for Friday, a superintendent says the owner is sorting out a loan. Meanwhile the contractor keeps buying materials and running payroll. By the time the problem is obvious, a statutory deadline may already be close.
The single most important step is to treat a missed payment as a legal event, not just an accounting one. That means reviewing your contract and your paperwork immediately and getting advice while every option is still available.
Gather this paperwork now
Payment disputes are usually decided by the documents. Before you call anyone, pull together:
- The signed contract or subcontract, including scope, price, payment schedule and change-order terms
- Every change order, with signatures and dates — and a list of any extras done without one
- Daily logs, photos, delivery tickets and inspection records showing what was done and when
- All invoices and payment applications, with proof of when and how they were submitted
- Correspondence about payment, including texts and emails, saved in one place
- Any lien waivers or releases you have already signed
If invoices were not submitted in the form or on the timetable the contract requires, fix that going forward right away; it can affect when payment is legally due.
The legal tools New Jersey provides
Which remedies apply depends on whether the project is private or public, residential or commercial, and on your place in the chain. In broad terms:
- Construction Lien Law. On many private projects, contractors, subcontractors and suppliers may be able to file a construction lien claim against the property under N.J.S.A. 2A:44A-1 et seq. The statute imposes strict deadlines measured from the last date of work, and residential projects require a Notice of Unpaid Balance and an arbitration step before a lien can be filed. Missing a step can forfeit the right entirely, and a lien is not available in every situation.
- Prompt payment rules. New Jersey's prompt payment statute sets time frames for payment on many private construction contracts and can provide remedies such as interest and, in some circumstances after proper written notice, a right to suspend work.
- Contract claims. A claim for breach of contract, and in some cases related theories such as unjust enrichment, remains available whether or not a lien is. Contract claims generally carry a six-year limitations period in New Jersey, though when the clock starts is fact-specific.
Public projects follow different rules, often involving payment bonds rather than liens. Because the deadlines and procedures vary by project type, the firm's guide to New Jersey lien law is a useful next read.
A practical response sequence
Confirm what is owed and when it was due
Compare your invoices against the contract terms and any approved change orders so your number is defensible.
Calendar the deadlines
Work out, with counsel, the last date of work and any notice, lien or claim deadlines that run from it. Write them down.
Send a clear written demand
State the amount, the basis and a deadline, and keep it professional. Many disputes resolve at this stage; see the firm's approach to resolving payment disputes.
Decide whether to keep working
Continuing indefinitely deepens the hole; stopping without the right to do so can put you in breach. Get advice on the contract and statute before suspending.
Preserve security
Where available and timely, take the steps needed to protect a lien or bond claim while negotiations continue.
Escalate if needed
If negotiation fails, the contract's dispute clause — mediation, arbitration or court — sets the next step.
Mistakes that cost contractors their leverage
Four habits account for most of the leverage contractors lose before a dispute even begins:
- Working for months on promises of payment
- Doing extra work on a verbal instruction with no written change order
- Letting a notice, lien or claim deadline pass while waiting for a check
- Signing a lien waiver or release before confirming the matching payment has actually cleared
Each of these is common, and each is avoidable. The lien-waiver mistake is especially painful because it can give up rights in exchange for money that never arrives. For an illustration of how documentation, a lien and negotiation can work together, see the firm's hypothetical payment-recovery scenario.
Preventing the next one
The best protection is a contract — such as a carefully drafted subcontractor agreement — that makes payment terms, retainage, notice procedures and dispute resolution explicit, together with a habit of vetting owners and GCs before taking on large jobs. The article on subcontract clauses worth negotiating walks through the key terms, and the firm's construction law practice covers contracts, compliance, liens and payment disputes for contractors.
Questions & answers
Payment questions from contractors
Can I stop working if I'm not being paid?
Sometimes, but it depends on your contract and on whether the statutory conditions for suspension, including any required written notice, have been met. Walking off a job without that footing can expose you to a breach claim and back-charges. Get advice on your specific contract before you pull your crew.
Is filing a lien claim the same as suing?
No. A lien claim is a way of securing a debt against the property; it does not by itself get you paid. To enforce it, further legal action is generally required within its own time limits, and the underlying contract claim may need to be pursued as well. A lien is best understood as leverage and security, not a final remedy.
How long do I have to file a construction lien in New Jersey?
The Construction Lien Law sets strict deadlines measured from the last date you provided work, services, equipment or materials, and residential projects add a Notice of Unpaid Balance and arbitration step that must be completed first. Because the time frames are short and the steps technical, speak with counsel as soon as payment stops rather than estimating the deadline yourself.
The GC wants a lien waiver with my payment application. Should I sign?
Read it carefully first. Some waivers are conditional on receiving a specific payment; others release rights immediately and broadly. Signing an unconditional waiver before the money has cleared can leave you with nothing to fall back on. If the form is unclear, ask for a conditional version tied to the exact amount being paid.
