Construction Payment Dispute Attorney — Los Angeles
Nonpayment on a construction project is rarely a cash flow problem alone. It is a leverage problem — and California gives unpaid contractors leverage that expires on a fixed schedule.
What can a contractor do when a California owner refuses to pay?
An unpaid contractor, subcontractor, or supplier can record a mechanic's lien against private property, serve a stop payment notice to intercept undisbursed construction funds, make a claim against a payment bond, sue for breach of contract, and pursue prompt payment penalties and attorney fees under the Civil Code. Each remedy has its own strict deadline, generally measured from completion or from last furnishing.
Getting Paid on Los Angeles Construction Projects
California's construction payment statutes are unusually favorable to the party who moves on schedule and unforgiving to the party who does not. Mechanic's lien, stop payment notice, and bond claim deadlines run from defined events — completion, cessation, recordation of a notice of completion, or last furnishing of labor or material — and they are not extended because the parties were still negotiating.
The statutes also carry teeth beyond the principal. California's prompt payment provisions impose penalties on owners and higher-tier contractors who withhold progress payments or retention without a good faith dispute, and they provide for attorney fees to the prevailing party. On many files, the penalty and fee exposure — not the invoice — is what actually moves the other side to settle.
Withholding is frequently justified by asserted backcharges, defective work, or delay damages, which is where a collection matter becomes a two-way case. The response depends on whether the withheld amount is proportionate and documented, and whether the asserted defect or delay claim is genuine or a negotiating position.
330 North Brand Boulevard, Suite 1280
Glendale, California 91203
Los Angeles County Superior Court, including the Glendale and Stanley Mosk courthouses.
Construction contracts, payment and lien claims, defects, delays, and project litigation for owners and contractors.
Payment Matters We Handle
For general contractors, subcontractors, suppliers, and owners on private and public work in Los Angeles County.
Unpaid Invoice Collection
Demand, negotiation, and suit on unpaid progress payments and final billings, including breach of contract, common count, and quantum meruit theories.
Retention Release
Enforcing release of withheld retention after completion, including the statutory limits on how much may be withheld and for how long.
Prompt Payment Penalties
Statutory penalties and attorney fees where progress payments or retention were withheld without a good faith dispute over a bona fide issue.
Stop Payment Notices
Serving and enforcing stop payment notices to intercept undisbursed construction funds held by an owner or a construction lender.
Backcharge Defense
Challenging deductions for asserted defective work, cleanup, supervision, and delay where the backcharge is undocumented or disproportionate.
Bond & Public Work Claims
Payment bond claims and the separate notice and claim procedures that apply to public works projects in California.
Payment Disputes That Reach Our Office
Composite examples drawn from the kinds of matters this practice handles. They illustrate common fact patterns and are not descriptions of specific client cases or predictions of any result.
The Retention That Never Released
A subcontractor finishes its scope on a Glendale project, the building is occupied, and retention remains unpaid nine months later against vague punch list complaints. Whether the withholding is permitted depends on completion, the disputed amount, and the good faith standard.
The Backcharge Arrives With the Lien Deadline
A general contractor invoices a final billing and receives, instead of payment, a schedule of backcharges nearly equal to the balance. The lien deadline runs regardless of whether the parties are still exchanging spreadsheets.
The Owner Who Ran Out of Draws
An owner tells a contractor the construction lender will not fund the final draw. A stop payment notice served on the lender can reach undisbursed funds directly, which a lawsuit against the owner alone cannot.
When Nonpayment Needs a Lawyer
- An invoice is materially past due and communication has slowed or stopped.
- Retention has not been released after completion or occupancy.
- Backcharges have appeared for the first time when final payment came due.
- You are approaching a lien, stop notice, or bond claim deadline.
- The owner or general contractor may be insolvent or overextended.
- You have been asked to sign an unconditional release before receiving funds.
What to Do First
Fix the last-furnishing date
Every California payment remedy runs from a defined date. Establishing exactly when you last furnished labor or material determines which remedies remain available.
Check the preliminary notice
For most claimants, a timely preliminary notice is a prerequisite to lien and stop notice rights. Confirm it was served and to whom before relying on those remedies.
Never sign an unconditional release early
California's statutory release forms are strictly construed. Signing an unconditional release before funds clear can extinguish the very claim you are pursuing.
Payment Disputes — Questions California Clients Ask
What contractors, subcontractors, and suppliers ask when a Los Angeles project stops paying.
What are the most common causes of construction payment disputes in California?
Common causes include disagreements over the value of completed work, disputed change orders, delays in payment by owners or general contractors, alleged defective work used as a basis for withholding payment, back-charges, and disputes over the proper calculation of retainage.
What is retainage and can a contractor dispute it?
Retainage (or retention) is a percentage — typically 5% to 10% — of each payment that the owner or general contractor withholds from the subcontractor or contractor until project completion. If retainage is wrongfully withheld after substantial completion or in bad faith, the contractor may seek prompt payment through demand, mediation, or litigation.
What is the Prompt Payment Act in California?
California's Prompt Payment Act requires owners, general contractors, and subcontractors to pay within specified deadlines after receiving proper invoices or reaching payment milestones. Violation of the Act can result in the withholding party owing 2% per month interest on late amounts and potentially attorney's fees.
What is a stop payment notice?
A stop payment notice is a legal tool available to subcontractors and suppliers in California that directs a construction lender or public agency to withhold funds from the owner until the claimant's payment dispute is resolved. On public projects, it is often more effective than a mechanic's lien, which cannot attach to public property.
What is the difference between a payment dispute and a mechanic's lien?
A payment dispute is a contractual or legal disagreement about money owed for construction work. A mechanic's lien is a specific legal remedy — a security interest recorded against the property — that provides contractors, subcontractors, and suppliers with a means to enforce payment. Filing a lien is often a first step before pursuing litigation.
Can an owner withhold payment due to alleged construction defects?
Owners have the right to withhold payment for defective work, but the withholding must be in good faith and proportionate to the actual value of the alleged deficiency. Improperly withholding payment can expose an owner to claims under the Prompt Payment Act, including interest, penalties, and attorney's fees.
What is back-charging and how are back-charges disputed?
Back-charging occurs when a general contractor or owner deducts from a contractor's or subcontractor's payment for costs the paying party claims were incurred to correct the other party's deficient work or failures. Disputed back-charges should be addressed promptly, typically in writing, with supporting documentation.
When should I consult an attorney about a construction payment dispute?
You should consult an attorney immediately if you are facing unpaid invoices, improper retainage withholding, threatened back-charges, or a disputed change order. Mechanic's lien and stop notice deadlines are short, and missing them can extinguish your right to use those remedies permanently.
What are the options for construction collections in Los Angeles?
An unpaid contractor, subcontractor, or supplier can record a mechanic's lien against the property, serve a stop payment notice to reach undisbursed funds held by the owner or construction lender, claim against a payment bond where one exists, sue for breach of contract, and pursue statutory prompt payment penalties and attorney fees. Each remedy runs on its own deadline measured from completion or last furnishing, and negotiations do not extend those dates.
Local Representation
Liens and stop notices on Los Angeles County projects are recorded and enforced locally, on deadlines the courts apply strictly.
Talk to a Construction Attorney
Payment remedies expire on fixed dates that negotiations do not extend. Call before the lien deadline, not after it.