Changes to the Construction Act Effective October 1, 2019

On July 1, 2018, the first phase of regulations to the Construction Lien Act, now the Construction Act, came into effect.  The amendments modernize the Act and deal with payment issues. New holdback rules were implemented which include increases in the holdback period from 45 days to 60 days.

Recently, on October 1, 2019, amendments pertaining to prompt payment, adjudication and liens were made effective. The new rules for prompt payment will impact all levels of the construction industry. Some key points include:

1. Changes apply to contracts entered into on or after October 1, 2019;
2. Changes apply to all construction projects;
3. Parties to the contract cannot contract out of new prompt payment rules (i.e. through supplementary conditions, etc.);
4. Owners now have 28 days for payment on receipt of a ‘proper invoice’; and
5. All time periods are in calendar days, not working days.

Visit the website of the Ministry of the Attorney General for more information on the July 1, 2018 changes affecting holdbacks and the October 1, 2019 changes addressing prompt payment, liens and adjudication.