Construction Payment Demand Letter Template (Free Word Download)

What a demand letter needs to contain

• Identification: the project, the property address, the contract or PO number and date, and the parties.
• The account: each unpaid invoice — number, date, amount, due date under the contract terms — and the total now due. Attach a statement of account.
• The basis: the work or materials furnished and the contract clause or approved change order that makes the amount payable. Mention the pay application was submitted and any approvals received.
• Interest and costs: reference the interest rate in your contract, or the state prompt-payment statute if one applies to your project type — phrase it as "as provided by [contract clause / applicable law]" rather than asserting a specific statutory figure unless you have verified it.
• A deadline: a specific calendar date, typically 7–14 days out.
• The consequence: what you will do if unpaid — file a mechanics lien or payment-bond claim, suspend work if the contract allows it, and pursue legal remedies. State only what you are prepared and entitled to do.
• Reservation of rights and a clear invitation to raise any dispute in writing before the deadline.
• Signature by an authorised officer, on letterhead, with contact details.

Template — Payment Demand Letter

Bracketed fields are yours to complete. Delete any paragraph that does not apply (for example the bond paragraph on a private project).

[Your letterhead]

Date: [date]

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED, AND EMAIL

To: [Name, title, company, address of the party that owes you]

Copy: [Owner and/or general contractor, if you choose to copy them]

Re: Demand for Payment — [Project name], [property address]; Contract/PO no. [number] dated [date]

Dear [Name]:

[Your company] entered into the above contract with [their company] to furnish [describe scope] for the project at the address above. [Your company] has performed that work [and approved change orders nos. [list]] and submitted the following invoices / pay applications in accordance with the contract:

Invoice [no.] dated [date] — $[amount] — due [date] · Invoice [no.] dated [date] — $[amount] — due [date] · [continue as needed]

As of the date of this letter, $[total amount] is past due and owing. A statement of account and copies of the invoices are enclosed. [If applicable: No written objection to any of these invoices has been received.]

Demand is hereby made for payment of $[total amount] in full on or before [deadline date]. Interest on the overdue balance is accruing [at the rate of [rate] per [period] under section [clause] of the contract / as provided by applicable law] from each invoice's due date, together with any costs of collection recoverable under the contract or by law.

If payment is not received by that date, [your company] intends, without further notice, to [record a mechanics lien against the property / serve a claim on the payment bond posted for this project] and to pursue all other remedies available under the contract and applicable law, including [suspension of work as permitted by section [clause] of the contract and] legal action to recover the amount due, interest, costs and fees.

If you dispute any portion of this account, please state the basis of your position in writing before the deadline so that it can be addressed. Nothing in this letter waives any right or remedy of [your company], all of which are expressly reserved.

Payment may be made by [method] to [payment details]. Please contact me directly at [phone / email] with any questions.

Sincerely, ______________________ [Name], [Title] [Company] [Licence no., if applicable]

Enclosures: Statement of account; invoices [nos.]; [copies of signed change orders]; [copy of preliminary notice].

Tone and accuracy rules

• Facts, dates and amounts only. Adjectives about the other party weaken the letter and can be read back to you later.
• Claim only what is contractually due. Overstated demands lose credibility and, if they become lien amounts, can create legal exposure in some states.
• Do not threaten anything you cannot or will not do; if you have no lien rights (for example, a missed preliminary notice), do not mention a lien — rely on the contract claim.
• Keep it to one page plus enclosures.

Send, log, follow up

• Send by certified mail with return receipt (or your state's prescribed method for notices) and by email the same day.
• Log the date sent, tracking numbers, the deadline given, and your lien or bond notice deadline from the free 50-state lookup — the demand deadline must fall well before any statutory deadline.
• Two business days before the demand deadline, one phone call: confirm receipt and ask for the payment date.
• Deadline passes unpaid → proceed to the notice of intent to lien (private) or the bond claim (public). Do not send a second demand letter with a new deadline.