When a Client Refuses to Pay a Contractor: What to Do?

If a client refuses to pay contractor bills, they can be held liable for the amount owed. So, you're not helpless against a non-paying client.


A Comprehensive Guide to Contractor Recourse for Non-Payment

As a contractor, you may be faced with a non-paying client at some point. Luckily, if and when you do find yourself in this difficult situation, there are steps that you can take to get the money you deserve. Not only can the techniques in this guide make it possible to get your money, but they can allow you to receive payment from a non-paying client as fast as possible.

When a Client Refuses to Pay a Contractor: What to Do?

If a client refuses to pay contractor bills, it's important to take action immediately. While some cases of non-payment are simply errors, many are due to the client not being satisfied with the quality of the work. However, in other cases, you may end up faced with a client who is simply trying to skate out of paying you.

In any case, it's essential to realize that clients are obligated to pay for the services that they agreed to. If they do not hold up their end, you need to take action.

Can a Contractor Sue for Non-Payment?

While a contractor will always be able to file a lawsuit against a non-paying client, a successful case is not guaranteed. In fact, you'll need to make sure that you thoroughly document everything and have the right representation.

Luckily, if you have evidence to prove that you held up your end of the contract, your chances of success in the courtroom are very high.

Can a Contractor Sue for Non-Payment Without a Contract?

Can a contractor sue a homeowner without a contract? While it's possible to file a lawsuit against a non-paying client even if you do not have a written contract, it's far more difficult.

Though, there are other ways that you can create a contract, such as a recorded verbal agreement. However, simply creating a written contract is typically much simpler and more effective.

What to Do If a Client Refuses to Pay You

As soon as you realize that a client is late on payment, it's important to take action right away. Here's what you need to do when a customer won't pay for building work or any other services you agreed to perform.


Always make sure that you reach out to the client who hasn't paid to tell them about the money they owe you. While it may come as a surprise to some, in some cases, it may turn out that the client simply forgot.

In these cases, you're very likely to get your funds quickly just by getting in touch with them. Furthermore, many clients will pay as soon as they realize that you intend to take legal action if they don't.

Try to find a peaceful solution

It's always best to work something out directly with the client if you can. That's because the cost of taking a client to court can be significant. Furthermore, the issue of non-payment can often be effectively solved by simply reminding the client that they failed to pay. Of course, it doesn't always work out that way.

It's best to allow a client who won't pay to do so in installments rather than as a lump sum. However, there may come a time when this doesn't work, which leaves you faced with a situation where it's necessary to take legal action.

If the client was not satisfied with the work that you did, it will usually be best to offer to redo the task if possible.

You Did the Home Construction Work, but the Homeowner Won't Pay Up: Now What?

In some cases, simply talking with the client or setting up a payment plan won't work, and it's crucial to take legal action right away in these situations. A contractor suing a homeowner for non-payment is warranted in these cases.

Arranging Progress Payments for Home Improvement Work Is Wise

If the task that you agreed to perform will be completed in stages, you might want to consider setting up a progress payment system. This means that the client will agree to pay you for each step in the process individually. If the homeowner refuses to pay the contractor, the contractor can then take legal action.

Therefore, they have the option of backing out before the work is completed, which can prevent non-payment in many cases. Though, it's important to note that this is not an effective solution if a client is withholding payment for poor workmanship.

If a client is withholding payment for poor work, you may need to redo the job.

File a Mechanics' Lien on the Property

If a contractor performs work on a property, and the customer refuses to pay the contractor, the contractor may be able to file a mechanics' lien on the client.

Unfortunately, many independent contractors are unaware of this potentially effective strategy when they're faced with a non-paying client.

Sue the Homeowner for Breach of Contract

If you perform the agreed upon services and are not paid, this is considered a breach of contract. As a result, you will be able to take the client to court for failing to hold up their end of the agreement.


How to Prevent Issues With Getting Paid as a Contractor

While you won't always be able to avoid non-paying clients, there are steps that contractors can take to make themselves less likely to be ripped off by someone who refuses to pay. Here are a few tips to keep in mind.

Choose your clients wisely

While you can't always predict who will try to skate out of paying you, it's important to be familiar with the red flags that you need to watch out for when taking on a new client. Here are a few things to look out for:

  • A general sense that the client isn't trustworthy
  • A history of past non-payment or late payments
  • Requests for services that you won't be able to perform

Remember that it is your right to refuse a client. Also, if something just doesn't seem right, it's important to never ignore your instincts.

Get it in writing

In order to prove that a client owes you money, you'll almost always need to have a written agreement. However, it's important to make sure that the form you use for your contracts includes everything that you'll need if you ever have to take a client to court.

These are a few of the most important things to include:

  • The services you've agreed to perform
  • Their signature and your signature
  • A formal agreement to pay you
  • The amount of time that they'll have to pay for
  • All fees associated with late payment

Get a deposit

One of the best ways to prevent non-payment is to require an up-front deposit. This will allow you to receive some money in advance, and it also demonstrates that the client is willing to pay you.

How to Get Paid on a Homeowner Project

It's essential to make sure that you have a system in place that will help to ensure that you only take on clients who will be able to pay on time. Here's what you need to do:

1. Prequalify the homeowner

It's best to make sure that clients are familiar with the services that you intend to perform prior to hiring you. This process is known as prequalification, and it helps to weed out clients who are likely to try to avoid paying.

2. Set expectations with the homeowner up front

It's important to ensure that both you and the client agree upon what services will be performed. The tasks that you'll perform should be explained in as much detail as the client asks for.

3. Document everything

In order to prevent non-payment and take action if you're ever faced with it, you'll need to provide proof of services rendered. Doing this effectively requires thorough documentation.

Not only will thorough documentation help you secure payment from a client who refuses to compensate you, but it's also a crucial part of managing your business as a contractor.

4. File a mechanics' lien when needed

While filing a mechanics' lien is somewhat of a last resort, there are situations when it's the best way to get the money you're owed. Here are a few examples of situations where you should seriously consider taking this step:

  • When a client outright refuses to pay
  • When a client refuses to communicate with you
  • When there seems to be no other way to motivate the client to pay you

Other Considerations to Ensure Smooth Business Operation

While these tips will be effective when it comes to securing payment in most cases, there are a few other tips that you should keep in mind. Here are five tried-and-true strategies to deal with the issue of non-payment:

  1. While you are talking to a non-paying client on the phone, it's important to maintain a calm demeanor. Presenting yourself as calm and in control will be much more effective than losing your cool.

  2. Do not compromise on the agreed upon amount.

  3. If you need to purchase equipment for a job, it's important to keep the receipts. This can be used to show proof of services rendered.

  4. Trust your instincts. If something does not seem right about a client, don't work with them.

  5. Make sure that you keep all records related to the job well-organized and separate from records that pertain to other jobs.

Independent Contractor: Payment Issues

While independent contractors often face non-paying clients and end up getting burned, it does not have to be that way. Your first line of defense against non-payment is the invoice that you send your clients, and you'll need to include the job(s) you performed, the agreed upon amount, and ensure that you complete the work to the specifications laid out by the client.

Unfortunately, there's always the possibility that a client simply will not pay. That's when you'll need to start thinking about legal action.

Suing for unpaid wages

If you need to sue a client for unpaid wages, make sure that you're properly prepared for your day in court. Not only do you need to hire a skilled lawyer, but you'll also need to ensure that your records are well organized and can be presented in the courtroom.

In most cases, you'll be taking a client to small claims court if they refuse to pay you. Though, this varies depending on the amount owed.

Independent Contractor: Misclassification

In some cases, workers who believe that they're independent contractors are actually employees and don't even know it, and this difference can be very important. Employees have access to protections that independent contractors do not.

Here are a few things that you could be entitled to if you were erroneously classified as an independent contractor:

  • Sick pay
  • Minimum wage
  • Workers' compensation
  • Employee benefits
  • Wages that were not paid
    However, it's key to note that all independent contractors do have the right to file a lawsuit for non-payment.

Employee vs. independent contractor

In most cases, independent contractors have a greater degree of autonomy than employees. Here are some of the key differences to be familiar with:

Degree of control

Independent contractors often have a substantial amount of control when it comes to the work arrangement. They're generally free to set their own hours as long as they complete tasks by the deadline.

Number of hours

In many instances, employees are paid an hourly rate. Some workers are paid a salary instead. However, independent contractors are paid for specific jobs individually.

Work expectations

While employees generally work continuously for a person or organization, independent contractors will usually have certain tasks that must be completed by a deadline. The specific terms and conditions typically vary from one job to another.


Liabilities are considered the employer's responsibility if an individual is an employee. However, this is not the case for an independent contractor.


Employees will be provided the tools that they need to perform their duties. However, independent contractors use their own equipment in most cases.


If you are an employee, your taxes will be automatically deducted from your paycheck. Independent contractors, though, are responsible for managing their own taxes.


Independent contractors are paid per job, and they are only paid when the job is completed. However, employees are paid per hour, monthly, weekly, or annually.

Filing a complaint to your employer

If you feel that you have been misclassified as an independent contractor, it is possible to take action by filing a complaint. Here are a few good reasons to do this:

  • The rate of pay was too low for the services you performed.
  • If you are paid hourly and some of your hours weren't logged, it's important to file a complaint right away.
  • If an employer claims to offer sick pay and doesn't, you should file a complaint.
  • If you did not receive overtime despite your employer's promises, filing a complaint right away is essential.

Our Business Insurance Policies Can Offer Protection

If you're a subcontractor that has not been paid, you can rest assured that our comprehensive business insurance policies will have you covered. So, give us a call to inquire about our policies or get a free online quote today.


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