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Significant amendments to the Builders’ Lien Act, soon to be the Prompt Payment and Construction Lien Act, and the corresponding regulations will come into force on August 29, 2022. This gives the industry six months to learn and adapt to the new processes.
The Government of Alberta published a news release on February 25, 2022, when the new regulations were released, which states:
What the regulations cover
The new regulations set out the rules for:
- administration of the adjudication process, including eligibility
- training and associated costs for adjudicators
- payment of lien holdbacks
- transition of existing construction contracts
- when change orders are subject to prompt payment rules
- administrative items, including adjudication procedures and timelines, and consolidation of disputes that are subject to prompt payment rules
The following legislative changes were passed in the fall 2020 and spring 2021 sessions, and will be in force on Aug. 29:
- A new adjudication process for the construction industry to address payment disputes.
- 28-day timelines for owners to pay proper invoices from general contractors.
- Contractors and subcontractors are required to pay their own subcontractors within seven calendar days of being paid themselves.
- Extended timelines (in calendar days) for registering liens from:
- 45 days to 60 days for the construction industry
- 45 days to 90 days for suppliers within the concrete industry only
- The oil and gas lien period remains at 90 days.
- New language has been added around public-private partnerships:
- Prompt payment rules only apply to construction, not operations and maintenance.
- Municipal public works projects are subject to prompt payment legislation, but provincial government projects under the Public Works Act are not.
- Clarification was added that the prompt payment rules apply to professional consultant (engineers and architects) contracts.
- Rules for posting a Certificate of Substantial Performance (which verifies that construction work is substantially complete) on job sites were modernized.
The complete news release can be found on the Government of Alberta website, here: UPDATED*: Payment solutions for construction workers | alberta.ca
The new regulations were passed by Order In Council, as follows:
- The revised Builders’ Lien Forms Amendment Regulation can be found here: 2022_051.pdf (alberta.ca)
- The new Prompt Payment and Adjudication Regulation can be found here: 2022_052.pdf (alberta.ca)
Both regulations will come into force on August 29, 2022.
Our Construction Team will be posting further updates and educational opportunities in the near future.
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This post is meant to provide information only and is not intended to provide legal advice. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this post to be outdated.