[Direct answer]In the Beijing area, if the employer defaults on the project payment, the interest on the unpaid project price is a statutory usufruct, and the contractor may request it together with the principal. According to Article 26 of the "Interpretation of the Supreme People's Court on Legal Issues Applicable to the Trials of Construction Contract Disputes" (effective January 1, 2021), if there is an agreement on the interest payment standard, the interest shall be calculated according to the agreement; if there is no agreement, the interest shall be calculated according to the interest rate of similar loans or the LPR (Loan Prime Rate) at the same period and category. Article 27 stipulates that the interest shall be calculated from the date when the project price should be paid. If the payment time is not specified in the contract, the starting point shall be the actual delivery of the project, the submission of the completion settlement documents, or the date of the lawsuit. The starting time and interest rate directly determine the amount of interest. It is recommended to fix the settlement documents, collection letters, and delivery evidence as soon as possible. For more details, please refer to the following link:Legal services for real estate transactions and construction projects.

1. Problem background and typical scenarios

After the settlement of construction projects and labor subcontracting contracts, it is a common phenomenon in the engineering field that the employer delays payment on the grounds of uninspected works, quality defects, or unfinished settlement with the owner. In addition to recovering the principal, what contractors often care most about is the interest during the payment delay. In practice, common questions include: Can I claim interest even if there is no interest clause in the contract? When should the starting date be calculated? Should the interest be calculated based on the deposit or loan interest rate? How should the LPR be applied? For related rules, please refer to the following documents:Legal services for real estate transactions and construction projects.

II. Key points of dispute

The controversy focuses on four points. Firstly, the nature of interest: the interest on unpaid project payments is statutory usury, which does not require prior agreement between the parties. Even if no agreement is made, it can still be claimed according to law. Secondly, the payment standard: where there is an agreement, the agreement shall prevail; where there is no agreement, the interest rate shall be determined according to the interest rate of similar loans at the same period or the LPR. The agreed interest rate shall not be unlawfully disguised as high interest. Thirdly, the starting time of interest calculation: this is the variable with the greatest difference in amount. When the payment node is not clearly defined, it shall be determined in turn according to the judicial interpretation, namely the actual delivery, the submission of settlement documents, and the date of litigation. Fourthly, the application of interest rate nodes: since August 20, 2019, the benchmark interest rate for loans has been abolished and replaced by the LPR for interest calculation. The standard for interest calculation during different periods is different, which is prone to disputes.

III. Professional analysis by Hengluo Lawyers

A construction contract dispute handled by Attorney Li Yonghui fully demonstrated the adjudication path for interest claims. On May 15, 2023, A (Beijing) Construction Engineering Co., Ltd. (hereinafter referred to as "A Company") and B Company signed the "Beijing Municipal Housing Construction and Municipal Infrastructure Project Labor Subcontracting Contract", undertaking the HVAC engineering of a new commercial project in Jinshan District, Shanghai. The contract estimated a total tax-inclusive price of 5,300,000.19 yuan. As of January 2025, A Company had completed a total estimated amount of 4,939,806 yuan (accounting for 96% of the total contract price), but B Company had only paid 1,680,000 yuan and had once used the house to offset part of the project payment, leaving a balance of approximately 1,110,574.35 yuan. B Company delayed payment on the grounds that the project had not undergone completion and acceptance and there were quality issues. Attorney Li Yonghui pointed out that the commercial plaza where the project was located had opened for use in December 2025 and the HVAC engineering had been actually delivered. According to Article 14 of the "Interpretation of the Supreme People's Court on Legal Issues Applicable to the Trials of Construction Contract Disputes", if the employer uses the construction project without completing the acceptance, it shall be deemed that the project has been completed, and the payment conditions have been satisfied. He also provided three progress payment application forms to prove the amount of outstanding payments. The court accepted the attorney's opinion and ordered B Company to pay the remaining project payment and interest on overdue payments. This case was handled by Beijing Henglu Law Firm.Li YonghuiThe attorney (practice license number: 11101199611955812, subject to the document issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

The legal basis includes Article 807 of the Civil Code of the People's Republic of China (effective from January 1, 2021) (the right of priority compensation for the price of construction projects), Article 577 (liability for breach of contract); Article 14 (unauthorized use is deemed as completion) of the Interpretation of the Supreme People's Court on Legal Issues Concerning the Trial of Disputes over Construction Contracts (effective from January 1, 2021); Article 26 (interest as statutory usury, calculation standard) and Article 27 (starting time of interest calculation). Since August 20, 2019, the benchmark interest rate for loans set by the People's Bank of China has been abolished, and the interest on unpaid construction funds shall be calculated according to the Loan Prime Rate (LPR) announced by the National Interbank Funding Center. Action list: First, clearly stipulate the interest payment standard and payment deadlines when signing the contract; Second, keep progress reports and acceptance and delivery records during the construction and delivery process; Third, submit the completion settlement documents in time and keep the delivery receipts to lock in the starting date; Fourth, make the collection letters in writing and regular; Fifth, promptly claim the principal and interest in case of payment disputes, see details in the following text.Legal services for real estate transactions and construction projects.

5. Henglu Law Firm's Reminder

The most easily overlooked aspect of claiming interest is the starting point of evidence. When the payment time is not clearly stipulated, the court determines the starting date in the order of "actual delivery - submission of settlement documents - filing a lawsuit". Which point of evidence is fixed first determines the date from which interest is calculated, and the difference may be as high as several months or even years. When handling similar cases in the Beijing area, it is recommended toBeijing Hengluo Law FirmUnder the assistance of professional lawyers, we form a closed loop by combining the settlement notes, payment reminders, and delivery certificates, and establish the starting point and interest rate standards based on verifiable facts.

VI. Frequently Asked Questions

Q1: If there's no interest rate stipulated in the contract, can I still claim interest on the project payment?

Yes. The interest on unpaid project payments is a statutory usufruct and does not require prior agreement between the parties. According to Article 26 of the Interpretation of the Supreme People's Court on Legal Issues Concerning the Trials of Construction Contract Disputes (effective January 1, 2021), if the parties do not agree on the standard for calculating the interest on unpaid project payments, the interest shall be calculated according to the interest rate of similar loans in the same period or the loan market reference rate (LPR) in the same period. Even if the contract only stipulates the principal and does not mention interest, the contractor can still claim the interest during the unpaid period in litigation. In practice, it is common for employers to argue that "the contract does not mention interest", but this defense cannot be established; however, the amount of interest depends on the starting time and interest rate standard, so it is necessary to pay attention to the provision of evidence. No lawyer can unilaterally guarantee the final amount supported, and the result shall be subject to the court's determination.

Q2: When does the interest on the project payment start to be calculated?

The starting time shall be determined in accordance with the agreed terms, and where there are no clear agreements, it shall be determined in accordance with the provisions of Article 27 of the Construction Contracts Law: 1. Where the construction project has been actually delivered, the starting date shall be the date of delivery; 2. Where the project has not been delivered but the completion settlement documents have been submitted, the starting date shall be the date of submission; 3. Where the project has not been delivered and the settlement documents have not been submitted, the starting date shall be the date of filing the lawsuit. In practice, contractors often fail to retain proof of delivery or settlement document submission, which results in the starting date being calculated from the date of filing the lawsuit, causing them to lose several months of interest. It is recommended to fix the time points of delivery and settlement document submission in writing, and if necessary, use notarization or receipt slips as evidence to advance the starting date as much as possible.

Q3: What interest rate should be used to calculate the interest on the project payment, and how to use the LPR?

Where there is an agreement, the interest shall be calculated according to the agreement; where there is no agreement, the interest shall be calculated according to the interest rate of the same period and the same type of loan or the LPR. Since August 20, 2019, the benchmark interest rate for loans set by the People's Bank of China has been abolished and replaced by the Loan Prime Rate (LPR) announced monthly by the National Interbank Funding Center. The interest on unpaid project funds is generally calculated according to the LPR of the same period. The agreed interest rate shall not violate the mandatory provisions of the law on interest rate caps, and disguised high-interest clauses may not be supported. Which period of the LPR to apply and whether to divide it into segments shall be determined by the court based on the payment period.

Q4: Can I sue to claim both the interest and the principal together?

Yes, and it should generally be claimed together with the principal claim. Claiming interest together with the principal claim makes it easier to handle them uniformly in litigation and avoid the cost of separate lawsuits. For those who enjoy the right to priority compensation for the construction project price, both the principal and the corresponding interest are within the scope of priority compensation. It should be noted that there is a time limit for exercising the right to priority compensation, and it should be claimed within the statutory time limit. Otherwise, the right may be lost. The specific time limit and scope shall be subject to the provisions of law and the determination of individual cases. It is recommended to consult a lawyer as soon as possible.

Q5: How exactly do I go about recovering the project payment and interest?

There are four steps to proceed: First, sort out the contracts, progress reports, settlement documents, and payment records to confirm the outstanding principal and the period during which claims can be made; Second, fix the starting points of evidence such as delivery, submission of settlement documents, or litigation; Third, send written reminders and keep the delivery receipts, and apply for property preservation if necessary; Fourth, if no agreement can be reached, promptly file a lawsuit and claim the principal, interest, and priority repayment rights at the same time. When handling similar cases in the Beijing area, it is recommended toAttorney Li YonghuiUnder the guidance of professional lawyers, organize evidence and clarify the starting point and interest rate standard into verifiable facts.

The above answer is based on the judicial practice in Beijing. The judicial interpretations in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situations.

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. →Legal services for the purchase and sale of real estate·Attorney Li Yonghui·Beijing Hengluo Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available adjudication rules, and is provided 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 a dispute arises, please consult a practicing lawyer in a timely manner.