A general contractor has gone quiet on three invoices. The work is finished, the balance is not disputed in writing, and every call now goes to voicemail. Before you decide how to chase it, there is a question that outranks all of the others: what deadline is running, and how much of it is left.
Construction receivables are governed by clocks that most other industries do not have. Mechanic's lien and payment bond deadlines typically run from your last day of work or last delivery of materials, not from the invoice date or the date you stopped being paid. Those deadlines are short, they vary by state and by whether the project is public or private, and once they pass the balance becomes an ordinary unsecured debt worth considerably less. Establish your dates before you choose between collecting, filing, and selling.
Which clock is actually running?
Most contractors think in terms of how old the invoice is. The law generally does not. On a private project, a mechanic's lien deadline usually runs from the last date you furnished labor or materials to that property. On a public project you normally cannot lien public land, and your claim runs instead against the payment bond, with its own notice and filing deadlines.
- Private project. Lien rights, tied to last furnishing. Many states also require a preliminary notice early in the job, before anything goes wrong, or the lien right never existed.
- Public project. Bond claim rather than a lien. Federal work falls under the Miller Act; most states have their own version for state and municipal projects.
- No lien, no bond. You are left with breach of contract, which runs on a much longer statute of limitations but carries far less leverage, because nothing is secured.
The specific windows differ by state and are shorter than people expect, sometimes a matter of months from last furnishing. Confirm yours before doing anything else. Minnesota contractors can start with our guide to Minnesota business debt collection law, which sets out the lien, bond, and prompt payment rules that apply here.
Why pay-when-paid clauses stall so many subcontractor invoices
A subcontractor chasing a general contractor often hears a version of the same answer: we have not been paid by the owner yet. Whether that is a real defense depends on the wording in the subcontract, and the two common forms are not the same thing.
- Pay-when-paid is usually read as a timing clause. It affects when the GC has to pay you, not whether. After a reasonable period the obligation generally stands.
- Pay-if-paid attempts to make owner payment a true condition of your right to payment. Courts treat it far more strictly, and some states will not enforce it at all or require very explicit language.
This matters practically because it changes who you should be pressing. If the owner has paid the GC and the money has not reached you, the excuse evaporates and the account is usually collectible. Establishing that is often the single most useful thing a commercial collection agency does on a construction file, because a contractor asking gets nowhere and a third party asking on the record tends to get an answer.
What about retainage?
Retainage is the money withheld until the job closes out, and it behaves differently from an ordinary unpaid invoice. It is frequently the last balance outstanding and the one contractors write off most quietly, partly because chasing it feels like a poor way to treat a customer you want more work from.
Two things worth knowing. Retainage usually has its own release trigger in the contract, often substantial completion or final acceptance, and many states regulate how long it can be held and at what percentage. A retainage balance that is past its contractual release is not a favor you are asking for. It is a debt that is due, and it can usually be pursued like any other, including through the same lien or bond route if the deadline has not run.
When is selling construction receivables the better move?
Buyers do purchase construction receivables, and construction paper can price well because a documented file often carries lien or bond leverage behind it. The same feature cuts the other way: once those deadlines have passed, a construction balance loses much of what made it valuable, and buyers price accordingly.
A sale tends to fit when a contractor has accumulated balances across several jobs and several customers, particularly after a wind-down, a change of ownership, or a year where one bad GC relationship left a cluster of files. It fits less well for a single large balance on a live project, where the leverage you hold is worth more than a discounted sale.
- Sale fits better: multiple aged balances across customers, deadlines already passed, cash needed now, or the accounts came with an acquisition.
- Recovery fits better: the deadline is still open, the debtor is solvent and still trading, the file is well documented, and you can wait.
- Either way: pull the paperwork first. Signed subcontract, change orders, daily reports or delivery tickets, the last furnishing date, and any written acknowledgement of the balance.
If you are weighing a sale, our article on who buys B2B receivables portfolios explains what buyers look at and how a sale runs. RecoverMax buys commercial portfolios and also works construction accounts on contingency.
The order that tends to work
Deadlines first, documents second, strategy third. Find your last furnishing date and whether the project was public or private, because that decides how much time you have. Pull the subcontract and check for a pay-if-paid clause, a notice requirement, an interest rate, and a fee-shifting provision. Only then decide whether this is a demand letter, a lien or bond claim, a placement, or a sale.
The mistake we see most often is the reverse order: months of polite follow-up, then a decision to get serious, by which point the lien window has closed and the strongest card in the hand was never played.
If you have construction balances you are unsure about, send them over. We will tell you which deadline applies, what still looks recoverable, and whether this is a file to work or a portfolio to sell. Account review is free and there is no obligation.
Common questions
- How long do I have to file a mechanic's lien on an unpaid construction invoice?
- It varies by state and the clock usually runs from your last day furnishing labor or materials, not from the invoice date. Many states also require a preliminary notice early in the job. Confirm both dates for your state before choosing a collection strategy, because the deadline is often shorter than expected.
- Can a general contractor refuse to pay because the owner has not paid them?
- It depends on the subcontract. A pay-when-paid clause is usually treated as a timing provision, so the obligation stands after a reasonable period. A pay-if-paid clause attempts to make owner payment a true condition and is read strictly, with some states declining to enforce it.
- Do buyers purchase overdue construction invoices?
- Yes. Construction receivables are bought by commercial debt buyers and by collection firms that also purchase, including RecoverMax. Documented files where lien or bond deadlines are still open price better, because the leverage behind the balance is part of what a buyer is valuing.
- Is unpaid retainage collectible?
- Usually, once the contractual release trigger has been met, commonly substantial completion or final acceptance. Many states also regulate how long retainage may be held and at what percentage. Past its release date it is a debt that is due, not a favor, and it can be pursued like any other balance.