[Direct answer]In the Beijing area, the exercise period of the right of priority compensation for construction project prices is usually eighteen months, starting from the date on which the employer should pay the construction project price. When calculating this period, two key points need to be noted. Firstly, the determination of the starting point: Generally, it starts from the day following the expiration of the payment period stipulated in the contract. If there is no stipulation or an unclear stipulation regarding the payment period in the contract, the actual date of project delivery or the date of project acceptance shall generally be taken as the reference for calculating the starting point, which shall be determined in accordance with the current judicial interpretations and the specific circumstances of each case. Secondly, the issue of interruption of the period: If the contractor asserts his rights within the time limit, the reasonable period may be recalculated. Therefore, in practice, the contractor should assert his rights in writing and retain the delivery certificate before the expiration of the time limit to form a continuous time chain. Article 807 of the Civil Code of the People's Republic of China (effective January 1, 2021) stipulates that the contractor shall be entitled to priority compensation within the scope of the right of priority compensation for construction project prices. It should be particularly noted that if the contractor fails to assert his rights within the exercise period, he will lose the statutory protection of priority compensation, and the project payment will only be treated as an ordinary creditor's claim for settlement or enforcement, with both the burden of proof and the order of compensation being at a disadvantageous position.Real estate transactions and construction projectsThe services in this column can assist in calculating the accounting period and designing a claim plan.

I. Problem Background and Typical Scenarios

Common time-limit confusion includes: the contract stipulates installment payments, but the due dates of each installment are different; the project is completed but the acceptance is delayed, leading to disputes over the starting point; the employer delays the settlement, making it difficult to determine the payment deadline; the contractor has not asserted his rights for a long time, but the project payment is still unpaid; and the employer has entered bankruptcy proceedings and needs to declare his claims.Business and contract disputes in enterprisesThe method of sorting out the contract performance nodes in the column can be used for reference.

II. Key points of contention

Focus One: The method of determining the payment period. Focus Two: The selection of the starting point. Focus Three: The extension and interruption of the time limit. Focus Four: Fixing the evidence to assert rights. Focus Five: The interface with bankruptcy proceedings. Focus Six: Restrictions on the scope of priority compensation and its ranking.Special services and other casesThe deadline management instructions in the column can be used for reference. Focus 7: The scope of exercise of the priority right of compensation is limited to the project price itself, and there are disagreements about whether the right of compensation applies to other types of claims.

III. Professional analysis by Henglue Lawyers

When handling disputes over the right of priority compensation for project payments, Henglue Lawyers usually proceed in four steps. The first step is contract review: checking the payment terms of the project contract to determine whether specific payment dates and conditions have been agreed upon, and verifying whether there are agreements linked to project settlement and completion acceptance, which directly determine the starting point of the right of priority compensation. The second step is node fixation: collecting completion acceptance materials, settlement documents, invoice issuance records, correspondence letters, and payment reminder records to form a complete evidence chain proving the due date for payment. In practice, many disputes stall precisely because the due date for payment cannot be determined. The third step is asserting rights with documentation: explicitly exercising the right of priority compensation in writing within the time limit and suing in the court at the performance location specified in the contract or at the employer's domicile, thereby triggering the effect of interruption and restarting the calculation period. The fourth step is ranking evaluation: verifying whether there are mortgages on the project, whether there are other priority creditors, and the declaration situation of creditors, and evaluating the achievable compensation ratio based on this. It should be noted that if the employer has entered bankruptcy proceedings, the creditor's rights should be declared in accordance with the requirements of the bankruptcy procedure in a timely manner, and the exercise of the right of priority compensation needs to be coordinated with the bankruptcy procedure, as the procedural paths are different.Financial capital and cross-border transactions involving foreign entitiesThe ideas on creditor management in the column can be used as a reference for further study.

IV. Practical suggestions and legal basis

Action recommendations: First, check the payment deadlines and milestones stipulated in the contract; Second, collect evidence of acceptance and settlement to fix the starting point; Third, establish an internal ledger to track deadlines; Fourth, regularly assert rights in writing and keep records; Fifth, evaluate the priority of mortgages and other creditors; Sixth, timely file a claim for creditor's rights when the employer enters bankruptcy proceedings. Legal basis: Article 807 of the Civil Code of the People's Republic of China (effective January 1, 2021); the provisions on the exercise period of the priority right to compensation in the Interpretation of the Supreme People's Court on Legal Issues Concerning the Trial of Disputes over Construction Contracts; the provisions on the declaration of creditor's rights and the order of repayment in the Enterprise Bankruptcy Law of the People's Republic of China (effective June 30, 2007); the specific application shall be subject to the currently effective laws, regulations and judicial rulings.

5. Henglue Law Firm's Reminder

Firstly, the priority right of compensation has a time limit. Once the time limit expires, the statutory protection status will be lost, and the risk will be extremely high. Secondly, the starting point is the core of the dispute, and the settlement and acceptance materials must be fixed as soon as possible. Thirdly, it is difficult to prove a timely claim with only verbal collection. It is necessary to use written methods and keep the delivery certificates. Fourthly, the act of suing can produce an interrupting effect, but attention should be paid to the arrangement of the litigation time point. Fifthly, the scope of the priority right of compensation is limited to the contractor's project price, and it does not include other types of claims. Sixthly, the connection with the bankruptcy procedure requires professional judgment to avoid making the wrong choice of procedure.Special services and other casesThe column can also provide supporting explanations on deadline management.

VI. Frequently Asked Questions

Q1: What is the duration of the priority right to compensation?

It is usually eighteen months. It should be noted that these eighteen months do not start from the date of commencement of the project or the date of completion, but from the date when the employer should pay the construction project price. In practice, it is necessary to first determine the payment period stipulated in the contract. If the contract stipulates installment payments and the due dates of each installment are different, it may be necessary to separately calculate the corresponding time limits for each installment. In addition, if the contractor asserts his rights during this period, the reasonable time limit can be recalculated. Therefore, the key is to maintain continuous written records of the claims.

Q2: When exactly is the starting date?

Generally, the determination is made in the following order: Where the contract stipulates a payment deadline, the time limit shall be calculated from the day following the expiration of the agreed payment deadline; Where the contract does not stipulate or the stipulation is unclear, it may be determined by referring to the date of actual delivery of the project or the date of acceptance of the project. There may be disputes under different circumstances, so it is recommended to fix the completion acceptance materials, settlement documents, and correspondence in synchronization during the project progress, forming a complete time chain. In this way, when disputes arise, the due date of the payment can be effectively proven, and the loss of rights due to an unclear starting point can be avoided.

Q3: Is it guaranteed to be safe if you assert your rights several times during this period?

It's not necessarily safe. The key is whether the claim is effective and can be proven. To assert rights, the following conditions must be met: first, the content must specifically refer to the right of priority compensation for project funds, rather than a general demand for payment; second, it must be made in writing and be able to prove delivery; third, it must be raised within the time limit, forming a continuous time record. In practice, it's best to make periodic claims, such as claiming in writing at regular intervals and keeping the evidence, or directly exercising rights through litigation, as litigation itself can produce the effect of interruption and recalculation. Only verbal urging or internal records have weaker probative force and are easily denied in disputes.

Q4: Can I still request the project payment after the deadline?

The project payment itself can still be claimed, but it will lose its statutory protection status for priority compensation and become an ordinary creditor's claim. This means that it will be ranked lower than security rights and employee claims in the order of repayment, and may need to participate in repayment or apply for enforcement. The actual recovery rate will drop significantly. Therefore, failure to claim within the time limit does not mean that the debt is extinguished, but only that the level of protection is reduced. It is recommended to claim rights at least once in writing before the expiration of the time limit to form a verifiable record.Real estate transactions and construction projectsThe column can also provide guidance on the path to realizing creditor's rights.

Q5: Can the contractor still claim priority if the employer goes bankrupt?

This can be claimed, but it needs to be handled in accordance with bankruptcy procedures. After the employer enters bankruptcy proceedings, the contractor shall, in accordance with the requirements of the bankruptcy procedures, declare its creditor's rights to the administrator and claim the right of priority compensation. At the same time, attention should be paid to the special provisions on the exercise period of the right of priority compensation in the bankruptcy procedures. At this time, the order of realization of the right of priority compensation is determined together with other priority rights holders and workers' creditor's rights. In practice, the compensation ratio depends on the overall situation of the bankruptcy estate. It is recommended to immediately declare to the administrator after knowing the bankruptcy information, and simultaneously assess whether there are situations of false bankruptcy or malicious delay. If necessary, safeguard their own rights and interests through litigation.

The above content is based on the compilation of judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglu Law Firm for specific cases.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the necessary evidence, to avoid missing the statutory time limit. →Legal services for real estate transactions·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.