Remedies for Building Contractor Payment Issues in Maryland

 Posted on July 08, 2025 in Construction Law

Payment disputes are common for general contractors, subcontractors, and builders. People may use a variety of excuses to justify not paying on time. If you are dealing with a client who refuses to pay, Maryland construction law offers several payment remedies. These laws may be complex, but a knowledgeable attorney can help.

The most obvious solution is to bring a legal action for breach of contract. You may be able to negotiate terms to your advantage. However, that is not the only option in Maryland. An experienced Rockville, MD contractors’ rights attorney will assess the details of your dispute to determine the best solution for you.

What Is Maryland’s Mechanics’ Lien Law?

Instead of relying solely on a breach of contract claim, you can seek payment by placing a lien directly on the property where you completed work and used your materials. Under Maryland Code § 9‑102, this lien can help recover payment by forcing the sale of the property if necessary. Even if you do not have a direct contract with the property owner, you may still qualify to file a lien. However, you must follow strict deadlines and notice requirements to enforce this remedy.

How Can Contractors Use Maryland’s Prompt Payment Act to Get Paid?

Maryland’s Prompt Payment Act under statute § 9-302 protects contractors and subcontractors from unfair delays in payment. If your construction contract does not set a payment schedule, the law requires your client to pay undisputed amounts within 30 days. The clock starts when you issue an occupancy permit or take possession of the property. If your contract specifies a payment date, the client must pay undisputed sums within seven days of that date.

Subcontractors are protected as well. If you have not received payment from a contractor, they have seven days from the date they receive payment to give you your share. Withholding funds in bad faith can result in claims for interest, legal costs, and attorney’s fees. If you need to file a claim, the court can even order them to pay you with interest.

How Can Maryland’s Trust Fund Statute Help Contractors Secure Payment?

Maryland’s Trust Fund Statute, under Real Property § 9-201, helps protect contractors and subcontractors from losing payment for work or materials. The law states that funds for completed work must be placed in a trust. Then, the funds are distributed among subcontractors and suppliers. If someone wrongfully uses those funds for other expenses, those owed the money can pursue legal action. This statute ensures that money intended for specific work does not end up going somewhere else. It is a great way for subcontractors to secure payment.

What Remedies Work for Public Contracts?

You cannot use mechanics’ liens on public property. Therefore, contractors working on government projects rely on payment bonds. Under laws like Maryland’s Little Miller Act, which protects builders working on public construction projects, general contractors must secure payment bonds through a bond company. This guarantees funds for subcontractors and suppliers if the payments fall through. Think of payment bonds as a safety net, ensuring everyone involved in a project gets paid.

Contact a Rockville, MD Construction Law Attorney Today

At Salvado Law Offices, we commit to taking on your case with diligence and attentiveness. Our Ballenger Creek, MD contractors’ rights lawyers will protect your interests and ensure you get paid. Call 301-933-1814 to schedule a consultation and discuss your case today. Se habla Español.