Construction Law

The Importance of The Demand Letter featured image

The Importance of The Demand Letter

One of the biggest issues facing every contractor in the construction industry is receiving prompt payment. Nearly all contractors have faced it at some point in their careers, and the impact of it can be quite detrimental to their businesses. Especially when considering business costs like paying subcontractors or purchasing supplies. While there are a number of legal remedies for which a St. Petersburg construction attorney can assist you in executing, such as enforcing a mechanic’s lien or litigation, there’s one tactic that can start the process of receiving payment. It may also be the only tactic you need: writing a demand letter.

What is a Demand Letter?

A demand letter or a “lawyer letter”, if you have an attorney write it, states your request to receive funds for the services you’ve rendered, gives details of the specific situation leading to the letter, states what actions will be taken if payment is not received, and sets a deadline for payment. In certain cases, you may consider submitting a notice to lien, which is a demand letter that notifies your client of your intent to enforce a lien unless payment is remitted.

Why Are Demand Letters Important?

Demand letters can be a critical part of receiving payment for your work because:

  • They establish in a formal way that you are seeking payment for your invoice. From psychological standpoint, the demand letter is often quite effective in getting a client to take your invoice seriously. It notifies the client that, if necessary, you will take legal action to receive a payment. When the client weighs out the cost of legal fees, they are more likely to reconsider your invoice.
  • If the dispute goes to litigation, you will have a detailed outline of all circumstances leading to non-payment.

Tips for Creating An Effective Demand Letter

Ideally, you want the demand letter to be an instrument for getting your invoice paid and avoiding litigation. To do so, follow these tips:

  • Make sure the letter is typed (if you don’t hire a St. Petersburg construction attorney to write it for you.)
  • Record the specific details of the dispute.
  • Use a polite tone in the letter. It may be difficult to do this if you’ve been waiting a long time for payment, but you have to consider the goal of the letter. It’s to receive payment for your invoice, not to bash your client or vent your frustrations.
  • State a specific deadline for payment and consequences for non-payment.

To request a consultation with one of our experienced St. Petersburg construction lawyers, please call us today at 813.579.3278 or submit our contact request form.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.