Aaron Delgado thought he had found steady work when he began soliciting jobs for American Roofing & Siding in Minneapolis. For two years, the New Brighton, Minn., subcontractor brought in business for the company, until the payments stopped coming. By the time he walked away earlier this year, Delgado was owed more than $200,000 in unpaid commissions—money he may never recover.

The Minnesota Department of Labor and Industry pulled the company's license and imposed a $15,000 fine. However, Delgado told Fox 9 that state officials couldn't help him recover his losses because the contractor lacked insurance coverage.

Two lawsuits underline the company's legal troubles: a September filing alleged the contractor took nearly $6,000 for roofing work that was never completed, while ABC Supply sued in March for $280,000 in unpaid debts. A court ultimately ordered the contractor to pay the full amount plus legal fees.

The downfall of American Roofing & Siding is a cautionary tale about the financial risks roofing contractors face when payment protections aren’t clearly outlined in agreements. While Delgado’s experience is an especially severe case, disputes over unpaid work are all too common in the roofing industry—underscoring the importance of strong contracts and safeguards to protect both cash flow and reputation.

Challenges such as slow and unpredictable pay, and the resulting cash flow instability, continue to plague the industry—yet the burden of solving these problems consistently falls on subcontractors. According to Billd's 2025 National Subcontractor Market Report, while general contractors believe subcontractors receive payment within 30 days, the actual average is 56 days—nearly double the expected timeframe. This gap forces subcontractors to shoulder enormous upfront costs, with 64% reporting chronic slow payment issues, 75% having to fund materials out of pocket, and 86% covering labor expenses before receiving compensation.

How to Ensure Timely Payments 

Contractors who fail to adapt their credit and collection practices to today's harsher economic reality risk becoming casualties in an increasingly unforgiving marketplace.

Credit expert Thea Dudley emphasizes that contractors and subcontractors must abandon their traditionally trusting approach and implement rigorous credit checks, proper documentation procedures, and aggressive accounts receivable management. When facing collection issues, she advocates for direct, face-to-face confrontations with delinquent customers, including clear ultimatums about continuing work and willingness to escalate issues up the corporate hierarchy when necessary.

"Don't be the nice guy," she said. "Now is not the time. Interest rates are high. Cost of money is the highest has been in a very long time. Somebody is going in this little game of musical chairs. Somebody's not gonna have a chair. Don't let it be you." 

RC Legal Insights expert Trent Cotney warns that prime contractors and owners are becoming increasingly sophisticated in using contract terms to avoid or delay payments, creating new challenges for construction companies.

"I am seeing more legally sophisticated ways that owners and prime contractors are using to not pay trades on a job," Cotney said. "So be very mindful that you've got to up your game as well, right? If you've got your customer going legal and really diving into the terms of the contract, you've got to be prepared to speak apples to apples as it relates to that."

This involves scrutinizing contracts for minor technical discrepancies, such as warranty provisions that don't exactly match manufacturer specifications, and leveraging these small differences to justify withholding payment.

To counter these tactics, contractors must elevate their understanding of contract terms and develop stronger contract management skills. This includes thoroughly reviewing all contract terms before signing, ensuring they can meet every specification exactly as written, and addressing any ambiguities or potential compliance issues upfront rather than discovering them later when they become payment disputes.

The shift represents a more adversarial contract landscape where legal technicalities are increasingly weaponized to delay payments, forcing contractors to become more legally savvy in their business practices.