On May 31, 2017, Bill 142 was introduced at Queen’s Park. The aim of the Bill is to modernize the Construction Lien Act. There are a number of proposed changes to the act that will impact how payments are made to contractors, the adjudication of construction disputes and a contractor’s lien right.
There are two major changes that will impact contractors immediately. The first is the new payment system. Under the new Act the owner will have 28 days to pay a contractor after delivery of a proper invoice. A contractor will then have only 7 days to pay its subcontractors after it is in receipt of payment from the owner. These timelines will be mandatory and you will not be able to contract out of them. The new Act will also have dispute resolution provisions.
The second import change deals with a contractor’s lien rights. The timeline for the registration of a construction lien will be extended from 45 days to 60 days from the date of last supply. The subsequent timeline to perfect a line is also extended from 90 to 135 days from the date of last supply. The definition of “improvements” is expanded to include capital repairs that extend the normal life of a structure. Lien claims under $25,000.00 will now be referred to the Small Claims Court.
There are a number of other minor changes, such as the release of the holdback, which will now be mandatory, unless the owner publishes a notice of non-payment/set-off. Holdbacks will also have to be released as soon as the deadline to register liens has passed.
These changes will have a significant impact on Construction cases in Ontario and we could be dealing with them as early as next year.
For more information on the above or should you have any questions, please feel free to contact me directly.
Associate with the Personal Injury and Litigation Group
Disclaimer: This article is provided as an information resource. This article should not be relied upon to make decisions and is not intended to replace advice from a qualified legal professional. In all cases, contact your legal professional for advice on any matter referenced in this document before making decisions. Any use of this document does not constitute a lawyer-client relationship. Please note that this information is current only to the date of posting. The law is constantly changing and always evolving.