Massachusetts Business Attorney · Business Law
Getting paid is the most common source of conflict on a construction project. Massachusetts gives unpaid contractors, subcontractors and suppliers several tools, but most of them have short, strict deadlines. Which ones apply depends on whether the project is private or public and on the size of the job.
This guide covers the Prompt Pay Act and retainage law for larger private projects, mechanic’s liens, payment bonds and direct payment on public projects, and an ordinary breach of contract claim, followed by a deadlines table.
Start with the contract
Your contract sets the payment schedule, requisition paperwork, change order procedure and dispute process, and many payment fights turn on a notice clause someone did not follow. Our article on contractor-focused contract review covers what to look for. On the projects they cover, the statutes below override contrary contract terms.
Private projects: the Prompt Pay Act
The Massachusetts Prompt Pay Act, G.L. c. 149, § 29E, applies to contracts on which a mechanic’s lien may be established under c. 254, §§ 2 or 4, on a project where the prime contract with the owner has an original price of $3,000,000 or more. Projects with one to four dwelling units are excluded. On a covered project, the Act reaches subcontracts as well as the prime contract.
Every covered contract must set time periods for requisitions that cannot exceed:
- Approval or rejection: 15 days after submission. Each tier below the owner may be given 7 more days than the tier above it.
- Payment: 45 days after approval.
- Change order requests: a written request for a price increase must be approved or rejected within 30 days after the later of starting the work or submitting the request (with the same possible 7-day extension per tier).
The key protection is deemed approval. A requisition or change order request that is neither approved nor rejected in time is deemed approved unless it is rejected before payment is due. A rejection must be in writing, explain the factual and contractual basis, and be certified as made in good faith.
The Supreme Judicial Court enforced these rules in Business Interiors Floor Covering Business Trust v. Graycor Construction Co. (2024), where a general contractor failed to approve or reject three of a subcontractor’s requisitions. The Court held that missing the deadline does not waive the payor’s defenses, but the payor must pay the deemed-approved amount before, or at the same time as, raising those defenses in a later proceeding. It also held that the Act applied even though no lien could still be imposed when the subcontractor sued.
The Act also limits two common contract terms:
- Pay-if-paid clauses that condition your payment on the payor first being paid by someone else are void, except to the extent the money was not received because of your own uncured failure to perform, or because the third party became insolvent within 90 days after your requisition. The insolvency exception has added conditions, including that the party relying on it has preserved and pursued its own lien rights and other reasonable legal remedies.
- Keep-working clauses that require you to continue work when an approved payment is more than 30 days overdue are void, unless there is a quality or quantity dispute or a default by you, and you received prior written good-faith notice of it plus all sums due except the disputed amount.
Any contract term that tries to waive or limit § 29E is void.
Private projects: retainage
G.L. c. 149, § 29F governs retainage on the same group of private projects. Retainage may not exceed 5 percent of any progress payment. The statute also sets a notice-of-substantial-completion process, which is deemed accepted if the owner does not reject it in writing within 14 days. Starting 60 days after substantial completion (earlier if the contract allows), a contractor may apply for its retainage, and the application must be paid within 30 days, plus up to 7 days for each lower tier. Amounts withheld from retainage are capped, for example at 150 percent of the reasonable cost to finish or correct listed work, and must be explained in a certified writing before payment is due.
Private projects: mechanic’s liens in brief
A mechanic’s lien under G.L. c. 254 is not a single filing. It is a three-step process, and missing any step dissolves the lien:
- Notice of contract recorded at the registry of deeds (§ 2 for a contract with the owner, § 4 for subcontractors and suppliers), by the earliest of 60 days after a notice of substantial completion is recorded, 90 days after a notice of termination is recorded, or 90 days after the last day labor or materials were furnished.
- Statement of account recorded under § 8, by the earliest of 90 days after a notice of substantial completion, 120 days after a notice of termination, or 120 days after the last work.
- A civil action to enforce the lien, filed within 90 days after the statement is recorded (§ 11), with an attested copy of the complaint recorded within 30 days after the action begins (§ 5).
In other words, a lien must be enforced in court within months, not years. Lower-tier claimants with no direct contract with the general contractor should also send a notice of identification to the general contractor by certified mail, return receipt requested, within 30 days after starting work, or their lien may be capped at the amount due under the general contractor’s subcontract that includes their work (§ 4).
Our mechanic’s lien series covers each step in detail: what contractors, subcontractors and owners need to know; deadlines, substantial completion and the rolling lien; subcontractor tiers and the notice of identification; and how to bond off a lien.
Public projects: the payment bond
On public buildings and public works with a contract over $25,000, G.L. c. 149, § 29 requires the awarding authority to obtain a payment bond of at least half the contract price, covering labor, materials, equipment rental and certain related charges.
- Direct contract with the general contractor: if you are not paid within 65 days after payment was due, you may sue on the bond in the Superior Court within one year after the last day you performed labor or furnished materials included in the claim.
- Contract with a subcontractor instead: you must also give the general contractor written notice within 65 days after your last work, stating with substantial accuracy the amount claimed and the party you worked for, by registered or certified mail or any manner allowed for service of civil process. The one-year suit deadline still applies.
A successful claimant is awarded reasonable legal fees approved by the court. Our companion article on surety bonds in Massachusetts construction explains bond claims in more depth. On private projects, any payment bond is a matter of contract, so its own terms control notice and suit deadlines.
Public projects: progress payments, retainage and direct payment
- Public buildings (G.L. c. 30, § 39K): the awarding authority must make each periodic payment within 15 days (30 days for the Commonwealth, including local housing authorities) after receiving the periodic estimate, and retainage for performance may not exceed 5 percent of the approved amount. Late payments carry daily interest at three percentage points above the Federal Reserve Bank of Boston’s rediscount rate.
- Public ways and similar public works such as roads, bridges, sewers and water mains (G.L. c. 30, § 39G): the same 15-day (30-day for the Commonwealth) payment schedule and 5 percent retainage cap apply, along with timelines for substantial completion and final estimates.
- Direct payment (G.L. c. 30, § 39F): on contracts under the public building bid laws, a qualifying subcontractor that is not paid may send a sworn demand for direct payment to the awarding authority, with a copy to the general contractor. For the final balance, the demand is available if the subcontractor is unpaid 70 days after substantially completing its work; amounts the general contractor disputes in a sworn reply go into an interest-bearing joint account. “Subcontractor” is narrowly defined, mainly filed sub-bidders and subcontractors approved in writing by the awarding authority.
Breach of contract, interest and Chapter 93A
You can always sue for breach of contract. The limitations period is generally six years after the claim accrues (G.L. c. 260, § 2), but that does not extend the much shorter lien and bond deadlines.
In a contract action, the clerk adds interest at the contract rate, if one is set, or otherwise at 12 percent per year from the date of breach or demand; if that date is not established, interest runs from the date suit was filed (G.L. c. 231, § 6C). A clear written demand letter helps fix that date.
Where the other side’s conduct is unfair or deceptive, not just a failure to pay, a business may also have a claim under G.L. c. 93A, § 11, which allows double or treble damages for willful or knowing violations and reasonable attorney’s fees. See also key legal issues in Massachusetts construction disputes and what makes a practice unfair or deceptive under Chapter 93A.
Key deadlines at a glance
| Step | Deadline | Source |
|---|---|---|
| Notice of identification (no direct contract with GC) | 30 days after starting work | c. 254, § 4 |
| Lien: notice of contract | Earliest of 60 days after notice of substantial completion, 90 days after notice of termination, or 90 days after last work | c. 254, §§ 2, 4 |
| Lien: statement of account | Earliest of 90 days after notice of substantial completion, 120 days after notice of termination, or 120 days after last work | c. 254, § 8 |
| Lien: enforcement suit | 90 days after statement is recorded; record attested complaint within 30 days after filing | c. 254, §§ 11, 5 |
| Public bond notice (contract with a subcontractor) | 65 days after last work | c. 149, § 29 |
| Public bond suit | 1 year after last work | c. 149, § 29 |
| Prompt Pay: approve or reject requisition | 15 days after submission (plus up to 7 days per lower tier) | c. 149, § 29E |
| Prompt Pay: payment | 45 days after approval | c. 149, § 29E |
| Private retainage application paid | 30 days after application (plus up to 7 days per lower tier) | c. 149, § 29F |
| Breach of contract suit | 6 years after the claim accrues | c. 260, § 2 |
Several of these deadlines run from dates, such as the last day of work, that can be disputed. Calendar them when you start work, submit requisitions and change requests in writing with proof of delivery, send statutory notices by certified mail, and do not sign a lien waiver for more than you have actually been paid.
Frequently asked questions
What happens if the general contractor never responds to my requisition?
On a project covered by the Prompt Pay Act, a requisition that is not approved or rejected in time is deemed approved unless it is rejected before payment is due. Under Graycor, a party that missed the deadline must pay before, or at the same time as, raising its defenses.
How long does a mechanic’s lien last in Massachusetts?
Not long unless you act. It is dissolved if the statement of account is not recorded on time, if suit is not filed within 90 days after the statement, or if an attested copy of the complaint is not recorded within 30 days after suit is filed.
What protects me on a public school or town building project?
On public projects over $25,000, a key protection is the payment bond required by c. 149, § 29. Without a direct contract with the general contractor, you must give written notice within 65 days after your last work, and any suit must be filed within one year after your last work.
Getting help with a construction payment dispute
Whether you are a general contractor, subcontractor, supplier or owner, the best results usually come from acting before a deadline passes. I help clients review contracts, prepare demands, preserve lien and bond rights, and pursue or defend payment claims. Learn more about our Massachusetts business law services, or contact our office at 978-273-8337.
About the Author
Richard Alan Gaudet, Esq. is a Massachusetts attorney at the Law Offices of Richard Alan Gaudet, LLC in Middleton, Massachusetts, who advises contractors, subcontractors, suppliers and property owners on construction contracts, payment disputes and mechanic’s liens. His practice focuses on professional license defense, business law and litigation, family law, and landlord representation, serving clients across Northern, Eastern, and Central Massachusetts. Reach him at 978-273-8337 or rgaudet@gaudetlawoffice.com. Office: 35 Village Rd., Ste 100, Middleton, MA 01949.
ABOUT THIS ARTICLE
This article was prepared by a Massachusetts attorney and is provided solely for general informational and educational purposes directed to members of the general public. It does not constitute legal advice and does not create an attorney-client relationship. The law applicable to any particular situation depends on the specific facts and circumstances of that matter. Readers are encouraged to seek the advice of a licensed Massachusetts attorney before taking any action.
