3 ways to settle payment disputes

On Behalf of | Jul 25, 2023 | Construction Contracts |

As a contractor, getting payment on time is not always easy. When buyers do not make their payment deadlines, it can create a headache that can keep you from finishing the work.

Construction dispute resolution is one way to ease the aggravation of legal action over payment disputes.

1. Learn how to de-escalate

Paying to take your clients to court for non-payment is expensive and time-consuming. Emotions between parties can get out of control and communication can stall. By working proactively to de-escalate the situation, you can work towards a fair resolution and possibly salvage your client/contractor resolution.

2. Review your options

While you may consider construction payment as the compensation you earned for services you provided, the actual definition often gets fuzzy when it comes to litigation. Even though you felt your handshake with the client solidified your contract, this is not always an acceptable form of negotiating your construction payments.

For a more sure legal standing regarding your payment, contractors use several forms that outline various factors related to payments and cost. The client reviews and signs the Application for Payment form before the project begins, though there are options for amending the form, it is a starting point.

3. Pursue dispute resolution

There are several ways to address non-payment with your client, and if working it out through discussions does not work, you can use a property lien. A lien allows you to encumber the client’s property until the client pays the debt. While it is not an ideal way to handle the problem, it is an option.

There are multiple ways to address a payment dispute. You are more likely to have success receiving your funds if you proactively address contract weaknesses.

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