• Specified dates refer to calendar days • Owner shall pay GC within 28 days or give "notice of non-payment" within 14 days of receiving proper invoice • If owner gives "notice of non-payment" - GC shall pay subs or give "notice of non-payment" within 7 days and commence adjudication within 21 days • If contractor gives notice of non-payment – subs shall pay sub-subcontractor or deliver "notice of non-payment" within 7 days & start adjudication within 21 days
Transition Rules The old legislation will only apply to a contract if: (a) entered into before amendment (regardless of when the subcontract was entered into); (b) a procurement process for the improvement was commenced before the amendment; or (c) the premise is subject to a leasehold interest which was entered into before amendment.
• If a Prime Contract was signed before the amendments, however a sub-contract was not entered into until after the amendments, the sub-contract still follows old legislation.
It is important for entities with long standing Master Service Agreements, AFPs or multi-year contracts to review when the Prime Contract, or the procurement process, was initiated.
Amended Act sets out minimum proper invoice requirements in s.6.1(1)-(6), however the owner has discretion to include (7) "any other information that may be prescribed" in their requirement for a proper invoice, except for provisions that makes the giving of a proper invoice conditional on the prior certification of a payment certifier or on the owner's prior approval.
• Can no longer make the giving of a proper invoice conditional on the prior certification of a payment certifier therefore owners will likely add particularly onerous conditions to their Proper Invoice requirements and add conditions that fall just short of certification
Change Orders & Adjudication
A party to a contract may refer to adjudication a dispute with the other party to the contract in respect of: payment under the contract, including in respect of a change order, whether approved or not, or a proposed change order (s.13.5 (2))
• A request for a change order triggers adjudication and if at any point a party to the contract is unhappy with the process it can refer the matter to adjudication
Mandatory bonding & Trust Rules
Mandatory 50% performance bond and 50% labour & material payment bond on public projects where contract price is $500,000 or greater. Owners are free to address tender security as before.
Imposing new trust obligations – s. 8.1(1): trust funds must be deposited in trust account and trustee must follow trust accounting rules: need to set up a trust account; single trust account is acceptable; no need for separate trust account for every project; trust funds to be segregated and traceable, as much as possible
If you have any questions about the amendments to the Construction Lien Act, please contact Krisha Ruchlewicz (905-629-0587 ext. 226 or email@example.com)