Ontario passes Construction Lien Amendment Act, 2017

Anthony Capkun
December 05, 2017
By
Sharon Vogel and Bruce Reynolds. Photo A. Capkun.
Sharon Vogel and Bruce Reynolds. Photo A. Capkun.
December 5, 2017 - “This legislation could not have been introduced at a better time [...]” said Ron Johnson, director of Prompt Payment Ontario, after it was announced the province passed The Construction Lien Amendment Act, 2017 (a.k.a. Bill 142).

“This is the biggest change to our construction laws in over 34 years,” said Yasir Naqvi, Ontario’s Attorney General. “These changes will have a real impact on people’s lives, giving workers assurance they will be paid on time and in full, and help to ensure disputes are resolved quickly.”

The act includes new prompt payment rules to ensure construction businesses and workers get paid in a timely manner. The act also modernizes the lien and holdback process, helps protect creditors and sets out a new adjudication process to resolve payment disputes faster.

“These changes, including promptness of payment and dispute resolution through adjudication will go a long way to modernizing the construction industry across Ontario,” said Bruce Reynolds and Sharon Vogel of BLG LLP.

SEE ALSO our interview with Bruce Reynolds and Sharon Vogel, who paved the way for Bill 142.

Key changes include:

• Providing more time for contractors and subs to resolve their disputes outside of court by extending timelines to file liens and start court actions from 90 days to 150 days.

• Ensuring contractors and subs know when to expect full payment by requiring holdback funds to be paid as soon as the deadline to file a lien passes.

• Protecting subs and workers should the general contractor file for bankruptcy by requiring surety bonding on public sector projects above a certain amount.

• Allowing condominium unit owners to remove liens from their unit in relation to common elements (e.g. corridors, lobbies).

• Referring construction lien claims under $25,000 to small claims court.

“We would like to thank the government for taking this issue seriously, and hope that we will see the immediate proclamation of this important piece of legislation,” Johnson added. “We hope that this ground-breaking piece of legislation will set the stage for change across the country.”

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