Construction Demand Letter

A construction demand letter informs the recipient that a serious violation of either the contract or payment terms has occurred and must be rectified. Additionally, it uses direct language to describe what these violations are and precisely how they can be rectified. This letter is often considered a vital step when seeking a mechanic’s lien should the issues continue without a remedy.

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Last updated July 22nd, 2025

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A construction demand letter informs the recipient that a serious violation of either the contract or payment terms has occurred and must be rectified. Additionally, it uses direct language to describe what these violations are and precisely how they can be rectified. This letter is often considered a vital step when seeking a mechanic’s lien should the issues continue without a remedy.

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Key Features

  • Legal Proof of Payment Request: Acts as proof to courts and arbitrators that attempts to seek payment or remedy were made in good faith.
  • Supports Mechanic’s Lien Rights: Shows compliance with the steps needed to obtain this lien and thus serves to preserve mechanic’s lien rights.
  • Resolves Disputes Without Litigation: Demonstrates that your company respects its contractual obligations and must be taken seriously.
  • Sets a Resolution Timeline: Names an exact date or cure period for a remedy or payment to be delivered.
  • States the Problem: Leaves no room for misinterpretation, therefore giving the offending party reasons to clarify or remedy the issue.

How to Remedy (5 steps)

1. Negotiate the Breach or Nonpayment

Attempt to settle the issue informally once a breach of contract or delinquency in payment is confirmed. Also, make sure to document all communication.

2. Formal Notice or Warning

Issue a formal notice of contractual breach or delinquent payment before taking further action, especially if required by state law (e.g., Illinois 770 ILCS 60).

3. Develop Then Send the Demand Letter

Write a demand letter summarizing the issue (e.g., change orders, missed payments) and seeking a remedy should the offending party continue to be uncooperative.

  • Begin with a professional header (e.g., company banner, logo).
  • Point out delinquent payments or explicitly state the offending action.
  • Discuss the potential legal remedies and options that could resolve the issue.
  • State when the desired remedy is expected by stating a deadline or cure period.
  • Present a resolution opportunity and close professionally and amicably.

4. Give Ample Time To Respond

Allow the deadline given for a response to arrive from the recipient. Generally, most letters grant a 7-15 day window for the recipient to respond.

5. Enforce Your Rights If They Don’t Comply

Explore additional options that rectify the issue in cases where the client ignores the letter, refuses to take action, or becomes hostile:

  • A third-party neutral arbitrator can be obtained (e.g., Better Business Bureau).
  • File a grievance with a body that provides oversight, such as a licensing board.
  • A mechanic’s lien can be placed on the property through the courts.
  • A lawsuit can be initiated and pursued (e.g., civil suits, quantum meruit).

Sample

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CONSTRUCTION DEMAND LETTER

[CLAIMANT’S NAME]
[STREET ADDRESS]
[CITY, STATE, ZIP CODE]
[PHONE NUMBER]
[E-MAIL]

Date: [DATE]

[RECIPIENT’S NAME]
[STREET ADDRESS]
[CITY, STATE, ZIP CODE]
[E-MAIL]

Re: [CONTRACT TITLE OR NUMBER]

Dear [RECIPIENT’S NAME],

This letter serves as formal notice regarding your breach of our construction contract, [CONTRACT TITLE OR NUMBER], dated on [ORIGINAL CONTRACT DATE].

As of the date of this notice, you have failed to perform the following obligations or have breached the contract by: [DESCRIBE BREACH OR MISSED PAYMENT].

Therefore, to satisfy the breach, this letter demands that you cure the issue with the following actions: [DESCRIBE HOW TO CURE OR REQUIRED PAYMENT AMOUNT].

This demand must be handled within [#] days of receiving this letter. If you do not cure this breach within this time, I reserve the right to pursue all available legal remedies, including filing a lawsuit for damages, without further notice.

I prefer to resolve this matter amicably and encourage you to contact me as soon as possible to confirm your intention to comply.

Sincerely,

_______________________

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