[Direct answer]In the Beijing area, the objects of recourse for subcontracted project funds are determined in a hierarchical manner. Firstly, the actual constructors may claim against their contractual counterparties (subcontractors or illegal subcontractors). Secondly, according to Article 43 of the Interpretation of the Supreme People's Court on the Application of Law in the Trials of Construction Contract Disputes (No. 25 of 2020, effective from January 1, 2021), if the actual constructors claim rights against the employers as defendants, the employers shall bear responsibility to the actual constructors within the scope of the unpaid construction project prices. Subcontracting and illegal subcontracting contracts are invalid due to violating the mandatory provisions of Article 28 of the Construction Law of the People's Republic of China (effective from March 1, 1998), but if the project has passed the completion and acceptance inspection, the employer may compensate the actual constructors at a discounted price in accordance with the contract provisions. It is recommended to fix the contracts, project quantities, and payment evidence as soon as possible, and apply for property preservation if necessary. For more details, please refer to the following link:Legal services for creditor-debtor relations and enforcement cases.

1. Problem background and typical scenarios

The construction project chain is long, and the "general contractor - subcontractor - actual constructor" model of subcontracting at multiple levels is a persistent problem in the industry. Typical scenarios include: after the general contractor wins the bid, he subcontracts the entire project to unqualified units or individuals, and the actual constructors cannot get paid after completing the work; the subcontractors abscond or are insolvent, and the actual constructors do not know who to turn to; the employer still owes the general contractor the project payment, but refuses to pay by saying "there is no contractual relationship with you"; under multiple layers of subcontracting, it is difficult to clarify who owes whom money. In these situations, the actual constructors often fall into a "deadlock of the contractual counterparty having no money". Related rules can be referred to here.Legal services for creditor-debtor disputes and enforcement cases.

II. Key points of contention

The dispute focuses on four points. First, contract validity: subcontracting and illegal subcontracting contracts violate mandatory legal provisions and are invalid, but the invalidity does not preclude the right to claim payment for the project. Second, order of recourse: first claim against the contractual counterparty (the subcontractor), and if the counterparty is unable to pay, then seek recourse against the employer within the scope of the employer's unpaid obligations according to law. Third, the employer's liability boundaries: the employer is only liable within the scope of the "unpaid project payments", rather than guaranteeing all debts. The burden of proof for the unpaid amount lies with the actual constructor. Fourth, evidence loop: the actual constructor needs to prove that he has completed the corresponding project volume, the authenticity of the subcontracting relationship, and the amount of the employer's unpaid obligations. In the judicial practice of Beijing, the court has become increasingly strict in reviewing "transparent claims" and has high evidentiary requirements.

III. Professional analysis by Hengluo Lawyers

A debt enforcement case handled by Attorney He Ningning of our firm fully demonstrates the idea of "penetrating through to the actual borrower to recover debts and strengthen compulsory enforcement", which is consistent with the logic of who to claim the subcontracted project payment from. The client, Liu ***, lent the money to his friend Zhang ***, who defaulted on the repayment. Attorney He Ningning first negotiated with the bank to stop the loss and then pursued recovery from the actual borrower, Zhang ***. On June 12, 2026, a mediation agreement was reached confirming the principal of 170,000 yuan and the loss of funds of 10,000 yuan, and an application for judicial confirmation was filed to obtain compulsory enforcement force. After Zhang ***, the debtor, breached the contract, Attorney He initiated compulsory enforcement and submitted an online investigation and control application to comprehensively investigate his deposits, online funds, vehicles, real estate, equity, financial management, and other properties within the limit of 180,000 yuan. This case shows that when the direct counterparty is unable to repay, it is crucial to identify the real obligor and his/her assets. Attorney Tian Jiaoyan of our firm (practice license number: 11101202111381309, subject to the document issued by the judicial administrative organ) also locks in the enforcement bottom line for creditors through setting strict default clauses and confirming in the mediation agreement in civil loan mediation. This case is handled by Beijing Henglu Law Firm.He NingningThe attorney (practice certificate number: 11101202511925103, subject to the certificate issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

The legal basis includes Article 28 (prohibition of subcontracting) and Article 67 (legal liability for subcontracting) of the "Construction Law of the People's Republic of China" (effective March 1, 1998); Article 1 (invalidity of subcontracting contracts), Article 43 (claims by the actual constructor against the employer), and Article 24 (settlement of project quantities and prices) of the "Interpretation of the Supreme People's Court on Legal Issues Applicable to the Trials of Construction Contract Disputes" (effective January 1, 2021); and the provisions on compensation by discounting after the invalidation of the contract in the "Civil Code of the People's Republic of China" (effective January 1, 2021). Action list: 1. Secure evidence of the subcontracting relationship (contracts, entry records, chain of command); 2. Confirm the completed project quantities and the amount payable; 3. Investigate the total amount owed by the employer to the general contractor; 4. List the subcontractor as a defendant in the lawsuit and legally require the employer to assume liability within the scope of the unpaid amount; 5. Apply for property preservation simultaneously. For details, please refer to the relevant provisions.Legal services for real estate transactions and construction projects.

5. Henglu Law Firm's Reminder

When recovering the subcontracted project payment, it is most unwise to "only focus on the contractual counterparty". When the subcontractor goes missing or becomes a shell company, it is necessary to promptly investigate the scope of the employer's unpaid obligations and clarify the key fact of the unpaid amount. At the same time, the legal relationship under multi-level subcontracting is complex, and it is essential not to miss the statute of limitations due to confused evidence. When handling similar cases in the Beijing area, it is recommended toBeijing Hengluo Law FirmWith the help of professional lawyers, we clarify the main parties involved, fix the evidence, and design the preservation and enforcement pathway.

VI. Frequently Asked Questions

Q1: If the subcontract is invalid, can I still recover the project payment?

Yes. Although the subcontracting and illegal subcontracting contracts are invalid due to violating mandatory provisions, if the construction project has passed the completion and acceptance inspection, the contractor may claim compensation at a discounted price in accordance with the contract agreement; if the unfinished part of the project has passed the acceptance inspection, the contractor may also claim the corresponding payment. The invalidity of the contract does not preclude the right of the actual constructor to request settlement, the key is to prove the amount of work and the amount payable. The specific results shall be subject to the evidence and the court's determination.

Q2: What evidence do I need to prepare for the subcontracted project payment?

The core evidence includes: contracts, agreements, or correspondence proving the existence of the subcontracting relationship; records of actual performance such as construction site entry, material procurement, and labor organization; work quantity confirmation forms, progress payment vouchers, and documents signed by supervisors or the employer's staff; reconciliation and collection records with the subcontractors and the employers; and clues to the employer's failure to pay the general contractor's project fees. The evidence should prove "I did the work, how much I did, who should pay, and how much is owed".

Q3: How much does it cost to resolve a dispute over subcontracted project payments?

The case acceptance fee shall be paid in accordance with the "Measures for the Payment of Litigation Costs" (Decree No. 481 of the State Council, implemented on April 1, 2007), with the amount of the litigation request as the base for calculating the fee in stages; separate fees shall be paid for applying for property preservation and project cost appraisal. The attorney's fee shall be determined through consultation between the law firm and the client, and there is no unified government pricing. For disputes involving large amounts and multiple parties, the cost will be correspondingly higher, and it is recommended to conduct a comprehensive cost estimate before entrusting the case.

Q4: How long does it usually take to recover the subcontracted project funds?

The first-instance summary procedure is concluded within three months, and the ordinary procedure within six months. Cases involving appraisal or multiple entities may take longer. The recovery of funds depends on the availability of property clues. Clear clues can lead to faster recovery, while auctioning prolongs the process. When handling similar cases in the Beijing area, it is recommended to apply for preservation and online investigation as soon as possible. The overall timeframe ranges from several months to one or two years, depending on the clarity of the subject and the progress of the enforcement process.

Q5: If the subcontractor absconds, who can we turn to to recover the project payment?

You can legally claim against the employer, but the claim is limited to the amount of the construction project price that the employer owes you. You need to first prove the subcontracting relationship and the amount of work completed, and then determine the specific amount that the employer owes the general contractor. If the evidence is sufficient, you can add the employer as a defendant or an enforced party in the lawsuit. If the employer defends himself by saying "there is no contractual relationship", according to the judicial interpretation, he cannot evade his responsibility within the scope of the unpaid amount. It is recommended to consult a professional lawyer as soon as possible.

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 courts may vary, which may affect the conclusions. Welcome to consult Hengluo Lawyers for specific cases.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →\nLegal services for creditor-debtor disputes·Attorney He Ningning·Beijing Hengluo 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. In case of disputes, please consult a practicing lawyer in time.