Experience teaches hard lessons in construction. After enough projects, most subcontractors develop an instinct for which main contractors are worth working for and which ones will cause problems. But if you're growing your business or entering new markets, you might not have that experience yet.
Here are seven red flags that experienced subcontractors watch for. Each one is a potential sign that a project or contractor will cost you more than it's worth.
1. Vague or Unusual Payment Terms
A reputable contractor will have clear payment terms. 30 days from invoice is a fair benchmark. Watch out for:
- Payment terms over 60 days. This pushes cash flow risk onto you. The Commercial Payments Bill would make 60 days the maximum in most business contracts, but on 14 October 2026 it was still before Parliament and not law.
- "Pay when paid" language. Ineffective under section 113 of the Construction Act unless someone further up the payment chain is insolvent, but sometimes buried in different wording.
- Excessive retention. More than 5% retention or retention held for over 12 months after practical completion is aggressive.
- Vague payment schedules. If they can't tell you exactly when you'll be paid, that's a problem.
Always read the subcontract before you sign. If the payment terms are unusual, ask why and get a straight answer.
2. Pressuring You to Start Before the Contract Is Signed
If a contractor is pushing you to mobilise before paperwork is finalised, they're either disorganised or deliberately trying to get you committed before you've agreed terms. Both are bad.
Working without a signed contract means you have limited legal protection if things go wrong. The verbal agreement that seemed clear at the time can be remembered very differently when there's a payment dispute.
3. High Turnover of Subcontractors
If the same contractor keeps cycling through different subcontractors for the same trade, ask yourself why the previous ones aren't coming back. Good contractors build long-term relationships with their supply chain. High turnover usually means:
- Payment problems driving subs away
- Poor site management making the work harder than it should be
- Unreasonable expectations or scope creep
- A confrontational management style
Talk to other subcontractors who've worked with them and ask whether they would go back.
4. No Clear Programme or Unrealistic Deadlines
A contractor who can't show you a programme is a contractor who doesn't have a plan. And a contractor who shows you a programme with unrealistic deadlines is setting you up to fail, then blaming you when you can't meet impossible timescales.
Look at the programme critically. Are there realistic lead times for materials? Is there enough time for your works given the scope? Are there buffers for weather and other common delays? If the programme looks too tight, it probably is.
5. Poor Communication During Tender
The tender period is when contractors are at their most attentive. They want your price. If communication is already poor at this stage, imagine what it'll be like once you're on site and they've moved on to winning the next job.
Warning signs include:
- Slow responses to pricing queries
- Unclear or incomplete tender documents
- Reluctance to answer questions about scope
- No site visit offered or arranged
6. History of Disputes or Legal Actions
Check the contractor's history:
- County Court Judgments (CCJs). Available through the Registry Trust. Several CCJs means several creditors who had to go to court to get paid.
- Adjudication history. While not publicly searchable, industry contacts may know if a contractor is a regular in adjudication. Frequent adjudications suggest a pattern of payment disputes.
- Companies House late filings. Persistent late filing of accounts is a red flag for financial management.
Each company page on Construction Rating flags overdue accounts, insolvency history and Gazette insolvency notices from public records. Here's how those signals work. To see what the records of failed firms looked like beforehand, search our register of 229 UK construction failures.
7. They Won't Provide References
Any contractor proud of their reputation will happily connect you with subcontractors they've worked with before. If they refuse or deflect when you ask for references, they either don't have good relationships with their supply chain or they know what those references would say.
You wouldn't hire an employee without references. Don't commit your business to a six-month project without them either.
Trust Your Instincts
If something feels off during the tender process, it usually is. The best subcontractors are selective about who they work for. They'd rather turn down a job than spend months chasing payment or fighting about variations.
Do your research, talk to other subcontractors, check the financials, and don't let the pressure to fill your programme override your judgement. A bad project costs more than no project.
Construction Rating lets subcontractors review the main contractors they work for. If you've worked for one, add your experience.