After years of discussion and consultation the current Construction Lien Act, which has been in place for the past 35 years, was revised with some significant changes on December 12, 2017. The revised Act will become effective for the most part on July 1, 2018 with some additional parts being implemented October 1, 2019.
Many problems and difficulties identified with the current Construction Lien process have been addressed with the hopes that the new system will provide better protections, quicker payments, and less procedural delays.
Some of the key provisions in the new legislation are:
- Payments to contractors and sub contractors will have required minimum payment times starting from delivery of an invoice (28 days for contractors to be paid and 7 days for contractors to pay a sub-trade).
- An owner or contractor can dispute the validity of an invoice and delay payment of the amount in dispute, but only if they serve the contractor or sub trade with a notice of non payment within 14 days of receipt of a proper invoice.
- If a contractor receives payment of its invoice from an owner it must pay all sub trades within 7 days unless the contractor commences an adjudication application against the owner.
- If a contractor or sub trade is unpaid a lien can be registered for up to 60 days (currently 45).
- Starting an action can be up to another 90 days (currently 45), in order to allow for a reasonable period to settle matters.
- Lien claims under $25,000 can be referred for trial to the Small Claims court.
- Holdbacks must be released and paid promptly after the lien period expires, unless a lien is registered.
There are many other changes and new procedures that will become law on July 1, 2018 and our construction and real estate lawyers will be fully versed in those changes and able to assist you with your specific situations as needed.
The content of this article is intended to provide a general guide to the subject matter and is not legal advice. Specialist advice should be sought regarding your specific circumstance.