Bill 37, which proposed some fairly comprehensive changes to the Builders’ Lien Act, was passed by the Alberta Government in November 2020. Over the next few months, the government plans to work with industry stakeholders to do develop the regulations necessary to implement the approved changes which are set to take effect July 2021.
So what are the changes to the Builders’ Lien Act?
Firstly, the name of the Act will be changed to the Prompt Payment and Construction Lien Act, a change which is meant to reflect the other changes to Act.
Once changes take effect, contractors and subcontractors who are owed at least $700.00 will be able to file a lien within 60 days after the date they last provided labour or materials. This is a $400.00 increase from the current minimum lien amount as well as a 15 day increase in the time to file a lien.
Another change will be the creation of a separate lien period for the furnishing of concrete as a material or labour, which will require contractors and subcontractors who have furnished concrete material or labour to file a lien within 90 days after the date they last provided materials or labour.
These two changes to the time to register a lien, will also increase the length of time before holdbacks for the major and minor lien funds can be released.
Additionally, the new act will require an owner, contractor, or subcontractor, who owes money under a proper invoice to pay the amounts owing no later than 28 days after receiving the proper invoice. The act also defines what constitutes a proper invoice.
The Government has approved this change in an effort to encourage prompt payment of amounts owing to contractors, subcontractor, labourers, and suppliers, and as such, the new act will include a prohibition on provisions in contracts to the effect that a contractor or subcontractor need only pay a subcontractor once they themselves have been paid.
So what if you disagree with a proper invoice? The new act will also contain a dispute adjudication process, in an effort to decrease the number of Builders’ Lien cases in the Courts. The exact adjudication process is still unknown at this time. Currently the Government is working with industry leaders to appoint a Nominating Authority who will be in charge of appointing adjudicators and setting procedures which will be set out in subsequent regulations.
If you have any questions about the upcoming changes to the Builders’ Lien Act, be sure to contact Stillman LLP to ensure that you properly comply with these new requirements.
By Sara Boulet