Release date: December 18, 2018
Construction Act Bullet Points:
- On July 1, 2018, the provincial government enacted significant amendments to the Construction Lien Act. The most obvious amendment is that the title of the legislation has changed, from the Construction Lien Act to the Construction Act. The amendments seek to (a) modernize the construction lien and holdback rules, (b) improve the timelines in which workers and businesses are paid, and (c) make payment disputes less costly and more efficient.
- The amended Construction Act applies to all contracts entered into on or after July 1, 2018, unless, (a) a procurement process for the improvement was commenced before July 2018, (b) the premises is subject to a leasehold interest, and the lease was first entered into before July 1, 2018, or (c) a subcontract was entered into under a main contract, and the main contract was entered into before July 1, 2018. Otherwise, the amended Construction Act does not apply to contracts entered into before July 1, 2018.
- There are a new set of rules for claimants (i.e. contractors) seeking to preserve a lien against a condominium project. For example, where a lien is registered against a condominium project, the claimant must, (a) give notice of the lien’s preservation in the prescribed form to the condominium corporation and to every unit owner; and (ii) register their claim for lien against all units that make up the condominium. In short, when a construction lien is registered against a condominium corporation, it affects every unit owner’s title.
- Unit owners will not be able to obtain a discharge of their portion of the lien by simply paying to the lien claimant the amount of the lien owing that is attributable to the unit owner’s common interest as set out in the declaration. If a unit owner wants to obtain a discharge of the lien, then the unit owner must bring a motion to Court under section 44 of the Construction Act, obtaining an order vacating the lien attached to their specific unit by posting security in the amount that is attributable to the unit owner’s common interest as set out in the corporation’s declaration.
- There are additional amendments in the pipeline for the Construction Act. Coming October 1, 2019, the provincial government plans to implement, (a) a dispute resolution mechanism allowing construction projects to continue without disruption, while disputes are resolved, and (b) a prompt payment system, which sets out specific deadlines and requirements relating to payments to contractors.