Payment disputes are one of the most common—and often the most damaging—issues in the construction industry. Whether it’s a disagreement over progress payments, withheld retainers, change orders, or accusations of defective work, these disputes can cause costly delays, strained relationships, and even litigation. For contractors, developers, property owners, and design professionals alike, navigating payment issues requires more than just legal muscle. It demands foresight, strategy, and deep knowledge of construction law.
At Stryker Slev Law Group, we’ve spent decades guiding clients across San Diego, Los Angeles, and Southern California through high-stakes construction disputes. Here’s what you need to know to navigate payment conflicts the smart way.
Understand the Root of the Dispute
The first step in resolving any payment conflict is identifying the source. Is the dispute due to non-performance, quality issues, project delays, improper documentation, or unclear contract terms? In many cases, payment is withheld not out of malice but due to misunderstandings or miscommunication.
Clear, well-drafted contracts with defined payment schedules, scope of work, and procedures for change orders are the best prevention. But when you’re already facing a dispute, gathering documentation—emails, invoices, contracts, daily logs, and correspondence—will be key to your case.
Review the Contractual Provisions
Most construction contracts contain specific language outlining how payments are to be made and what happens if there’s a delay or dispute. These provisions often include:
- Payment applications and deadlines
- Retainage terms
- Dispute resolution clauses
- Notice requirements
Failing to follow these provisions—such as not giving proper notice or missing a contractual deadline—can weaken your position. Smart legal strategy starts with a detailed contract review.
Utilize Mechanics Liens and Stop Payment Notices
California law provides powerful tools to secure unpaid funds. Contractors, subcontractors, and suppliers have the right to file:
- Mechanics Liens: These liens attach to the property itself and can force a foreclosure if unpaid.
- Stop Payment Notices: These notify lenders or property owners to withhold funds from general contractors until the dispute is resolved.
These remedies are subject to strict timelines and procedural requirements. A missed deadline can nullify your claim, which is why early legal involvement is crucial.
Consider Mediation and Negotiation Before Litigation
While court may be necessary in high-value or complex disputes, many payment issues can and should be resolved through alternative dispute resolution (ADR). Mediation allows parties to communicate openly in a controlled environment with the help of a neutral third party. It’s less expensive and time-consuming than litigation and often preserves business relationships.
At Stryker Slev Law Group, we often recommend mediation or strategic negotiation for clients with strong legal claims but a desire to avoid public court battles. We craft persuasive settlement strategies that align with your bottom line.
When Litigation Becomes Necessary
If informal resolutions fail, litigation may be your best—or only—option. Our firm is known for handling complex construction and commercial real estate litigation with precision. We understand how to frame your case in a way that speaks to judges, juries, and arbitrators. Whether it’s breach of contract, unjust enrichment, or fraud, we build aggressive cases that demand results.
Litigation isn’t just about filing a lawsuit; it’s about anticipating counterclaims, protecting your reputation, and aligning legal strategy with business goals. We help clients evaluate risk and cost at every stage.
Best Practices to Prevent Future Disputes
The smartest way to navigate a payment dispute is to avoid one in the first place. Consider implementing the following preventative measures:
- Use professionally drafted contracts tailored to your role in the project
- Keep meticulous records of all communication and changes
- Submit clear and timely invoices with backup documentation
- Educate your team on lien rights and notice requirements
- Build dispute resolution clauses into every agreement
A proactive legal partner like Stryker Slev can help you structure contracts and internal systems to minimize legal exposure on future projects.
How we can help
At Stryker Slev Law Group, we don’t just litigate—we strategize. With decades of experience representing clients in high-value construction and commercial real estate disputes across Southern California, we offer more than legal support—we provide smart solutions. Whether you’re a general contractor, developer, architect, or property owner facing a payment conflict, our team will work tirelessly to protect your interests and resolve disputes efficiently.
If you’re currently navigating a payment dispute or want to protect yourself against future conflicts, contact our San Diego office today to schedule a consultation. Let’s find the smartest path forward together.
