What are the most significant changes to the Construction Lien Act proposed by Bill 142, and how will they affect your business?
What is Bill 142?
Bill 142 was introduced in response to the recommendations in the report titled “Striking the Balance: Expert Review of Ontario’s Construction Lien Act”.
The report proposes numerous updates and amendments to the Construction Lien Act and other legislation.
What are the most significant changes in Bill 142?
1. Creating a prompt payment system
This new regime will speed up the flow of funds on construction projects by imposing deadlines unto payments to contractors and subcontractors. This will mandate a level of accountability.
2. Modernizing the construction lien and holdback rules
It will extend the deadlines for preserving, perfecting and filing liens, and update the rules for holdbacks.
3. Introducing mandatory adjudication
A mandatory dispute resolution mechanism will be introduced to speed up the resolution of disputes and prevent long construction delays.
|Current Act||Proposed change|
|Deadline for preserving liens||45 days||60 days|
|Deadline for perfecting liens||45 days||90 days|
|Deadline to file liens and start court actions||90 days||150 days|
|Payment deadline – owner to contractor||[Not specified]||28 days|
|Payment deadline – contractor to subcontractor||[Not specified]||7 days|
|Substantial performance financial threshold tiers||$500,000||$1,000,000|
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