What Can Contractors Do About Unpaid Work?

 Posted on June 18, 2025 in Construction Law

Late payments or unpaid work may be common in construction, but that does not make this any less frustrating. Contractors and subcontractors in the construction industry have tools at their disposal to help them obtain payment from delinquent customers. These range from "friendly reminders" to more aggressive legal tools. Understanding your legal options can help you recover what you are owed and protect your business from future payment problems. An experienced Rockville, MD construction law attorney can protect your business by ensuring that you receive payment owed for your work. 

What to Do If You Have Not Been Paid as a Contractor in Maryland

Review Your Contract

Start by reviewing your agreement. In Maryland, even oral contracts can be enforceable, though written contracts are easier to prove. Make sure payment terms, scope of work, and due dates are clearly outlined. If there is no formal contract, save emails, invoices, or text messages that show the agreement and the work completed.

Send a Formal Demand for Payment

Before taking legal action, consider sending a formal demand letter. A letter from your attorney summarizing the work performed, the amount due, and a deadline for payment can often prompt resolution. Maryland does not require this step, but it shows good faith and strengthens your position if litigation becomes necessary.

File a Mechanic’s Lien 

Maryland law allows contractors and subcontractors to file a mechanic’s lien for improvement to real property. Maryland's lien laws are particularly contractor-friendly, but only if you meet the procedural requirements. This lien places a legal claim on the property and can prevent its sale or refinancing until you are paid. Timing is critical to ensure you receive the lien, however. You must file the notice of intent to lien within 120 days of completing the work, and the actual lien petition must be filed in court within 180 days of completion. 

Litigation Options

If the unpaid amount is $5,000 or less, you can file a claim in Maryland small claims court without needing a lawyer. For larger amounts, a breach of contract lawsuit in circuit court may be appropriate. Depending on your contract, you might also be entitled to collect interest, attorney’s fees, and court costs. Maryland also has a Prompt Payment Act that applies to certain construction contracts, requiring payment within specific timeframes and allowing for penalty interest on late payments.

Explore Settlement Options

Litigation is a powerful tool, but not always the fastest or most cost-effective. A negotiated settlement can often resolve the issue quickly. Your attorney can help you evaluate whether that is the right move.

Call a Rockville, MD Construction Law Attorney 

Contractors have strong legal rights when it comes to unpaid work. If you are facing a non-paying client, consult with the experienced Green Valley, MD construction law attorney at Salvado Law Offices by calling us at 301-933-1814.