Construction Lien Deadlines Back in Place
Effective March 16, 2020 the government of Ontario suspended the application of limitation periods (the time period by which certain court actions must be started). As such, the time within which a party needed to preserve or perfect a construction lien was also presumed to have been suspended. The government has now clarified that this suspension no longer applies to time periods under the Construction Act effective April 16, 2020.
This means that parties will have the same amount of time to preserve and perfect liens that would have been remaining before the suspension began on March 16, 2020. For example, if a lien claimant’s last day of supply was March 15, 2020 and it had 60 days remaining to register a claim for lien on March 15th, that claimant has until Monday June 15, 2020 to register their claim for lien¹
In order for a 60-day deadline to apply, the project would need to be governed by the new Construction Act deadlines as opposed to the previous 45-day deadline under the Construction Lien Act. Of course, the best practice is to never wait until the deadline to allow time to properly complete and register a claim for lien and account for any unexpected difficulties.
This means that parties will have the same amount of time to preserve and perfect liens that would have been remaining before the suspension began on March 16, 2020. This also means that owners are now in a position to release holdback money once the time period for all liens with respect to the project has expired.
In addition, this government action eliminates any possible confusion as to whether Ontario’s new prompt payment regime continues to apply. Where prompt payment applies (and subject to the terms with respect to adjudication and notices of non-payment):
- Owners are required to pay general contractors within 28 days after the owner receives a proper invoice from the contractor.
- General contractors must pay subcontractors seven days after receiving payment from the owner.
- Subcontractors must pay other subcontractors within seven days of receiving payment from whomever hired them for the project.
If cash is not flowing on your project, the lawyers at Allan Snelling LLP can assist, contact our Kanata office for a no obligation consultation today.