Construction Law Reform: Prompt payment, adjudication, and modernization

Alberta's Prompt Payment and Construction Lien Act

Overview

The Government of Alberta's new Prompt Payment and Construction Lien Act is now in effect, replacing the former Builders' Lien Act. The framework establishes strict timelines and rules for payments, revises some key aspects of the existing lien legislation and creates a new adjudication framework for payment disputes within the construction industry.

These changes could have a profound impact on Alberta's construction industry. From payment due dates, holdback requirements, and lien periods, to fast-track adjudication as an alternative dispute process during the life of the contract, the reforms have the potential to change the way those in the construction industry do business.

Key changes at a glance

• Proper invoices to be issued every 31 days with strict payment times lines
• Obligations to notify parties of non-payment within 14 days using pre-set forms
• Provide transparency with respect to the status of invoicing and payment
• Mandatory partial payment of undisputed portions of invoices
• Increased lien periods from 45 days to 60 days and 90 days for the concrete supply sector
• Mandatory annual progressive release of holdback on projects in value in excess of $10M
• Implementation of adjudication as a new process to speed up dispute resolution mandatory in the event of non-payment or disputes about payment, including change orders
• Rules for Nominating Authorities and adjudicators
• The ability to stop work in the event of non-payment following a successful adjudication

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We are ready to help you prepare for these important legislated changes. Contact a member of our Infrastructure and Construction team today.