What to Do If You Have Not Been Paid on a Construction Project in Michigan

If you have been in construction long enough, you have probably dealt with it, work gets done, invoices go out, and payment… doesn’t come.

In Michigan, this isn’t just frustrating. It can put serious pressure on your business. Payroll, materials, and ongoing projects don’t pause just because an owner or general contractor delays payment.

The key isn’t just reacting quickly, it’s taking the right legal steps early.

Why Payment Issues Happen

Most payment disputes don’t come out of nowhere. They usually stem from:

• Disagreements over scope of work

• Project delays

• Poorly documented or disputed change orders

• Breakdowns in communication

On larger projects, layered contractor relationships can complicate things further, especially when determining who is legally responsible for payment under the contract.

Your Legal Options in Michigan

Michigan law provides several avenues for contractors, subcontractors, and suppliers to recover unpaid balances.

1. Construction Liens

Under the Michigan Construction Lien Act, eligible parties can file a lien against the property to secure payment for labor or materials provided.

However, lien rights are strictly time-sensitive and require proper notice. Missing a deadline can mean losing your right to recover entirely.

2. Breach of Contract Claims

If a party fails to pay according to the terms of a written or oral agreement, you may have a valid breach of contract claim. These claims often focus on enforcing payment terms, interest provisions, and damages outlined in the agreement.

3. Prompt Payment Protections

Depending on the structure of the project, Michigan’s prompt payment rules may also apply, particularly in situations involving commercial construction contracts.

4. Negotiation and Pre-Litigation Resolution

In many cases, disputes can be resolved through strategic negotiation before escalating into formal legal action, saving time, cost, and business relationships.

Don’t Wait Too Long

One of the biggest mistakes contractors make is waiting too long to act.

It’s understandable, no one wants to damage a working relationship. But delays can:

• Weaken your legal position

• Complicate lien rights

• Limit recovery options

Protecting Your Business

This isn’t just about one unpaid invoice, it’s about protecting your cash flow and long-term stability.

Handled correctly, payment disputes can often be resolved without disrupting the entire project, but it requires a proactive and strategic approach from the start.

If you’re dealing with a construction dispute, delayed payment, or contract issue, taking the right steps early can protect your business and your bottom line. Contact Sadecki & Associates at 248.328.1300 to discuss your situation.