Amendments to Ontario’s Construction Act – July 1, 2018

Frequently Asked Questions (FAQs)

 

Disclaimer: Daily Commercial News (DCN) is not permitted to provide legal advice or opinions, interpret the law or conduct legal research for its audience. Therefore, the general summary set out below and links to online resources provided are for information purposes only. A lawyer is in the best position to advise you about your legal rights and how the law applies to your situation. Daily Commercial News (DCN) does not warrant the accuracy or completeness of the information provided herein.

 

1. Why is Ontario’s Construction Act (formerly Construction Lien Act) changing?

The Ministry of the Attorney General of Ontario launched an independent expert review of Ontario’s construction laws in 2015.  The review resulted in a report known as Striking the Balance: Expert Review of Ontario’s Construction Lien Act.

According to the Ministry, Ontario has passed legislation based on the recommendations in that report in order to:

Complete details about the expert review process are available at www.constructionlienactreview.com, and complete text of Bill 142, Construction Lien Amendment Act, 2017 is available at www.ola.org/en/legislative-business/bills/parliament-41/session-2/bill-142.

 

2. When will the changes take effect?

According to the Ministry of the Attorney General of Ontario:

“The amendments to the construction lien and holdback rules will come into effect on July 1, 2018. New prompt payment and adjudication processes, and amendments related to liens against municipalities, will come into effect on October 1, 2019.

The government has made regulations to support the amendments. The new regulations will take effect at the same time as the amendments they support.” (Source)

 

3. Are there any changes to the certificates and notices that I usually publish in the Daily Commercial News (DCN)?

Yes, there are a few changes you should be aware of.  There are two new notices that are required to be published, and there are some changes to the three existing certificates and notices that are customarily published in the Daily Commercial News (DCN).

 

Two New Notices

 

Notice of Non-Payment of Holdback under Section 27.1 of the Construction Act

“27.1 An owner may refuse to pay some or all of the amount the owner is required to pay to a contractor under section 26 or 27, as the case may be, if,

(a) no later than 40 days after publication of the applicable certification or declaration of substantial performance under section 32, the owner publishes, in the manner set out in the regulations, a notice in the prescribed form, specifying the amount of the holdback that the owner refuses to pay; and

(b) the owner notifies, in accordance with the regulations if any, the contractor of the publication of the notice. 2017, c. 24, s. 24 (1).” (Source)

“(6) A notice of non-payment of a holdback under section 27.1 of the Act shall be in Form 6.” (Source)

“7. (1) An owner shall publish a notice of non-payment of a holdback under section 27.1 of the Act (Form 6) in a construction trade newspaper.

(2) For the purposes of clause 27.1 (b) of the Act, the owner shall, no later than three days after publication of the notice of non-payment, notify the contractor of its publication.” (Source)

 

Notice of Termination under Subsection 31 (6) of the Construction Act

“(6) If a contract is terminated, either the owner or the contractor or other person whose lien is subject to expiry shall publish, in the manner set out in the regulations, a notice of the termination in the prescribed form and, for the purposes of this section, the date on which the contract is terminated is the termination date specified in the notice for the contract. 2017, c. 24, s. 26 (11).” (Source)

“(8) A notice of termination under subsection 31 (6) of the Act shall be in Form 8.” (Source)

“8. A notice of termination under subsection 31 (6) of the Act (Form 8) shall be published in a construction trade newspaper.” (Source)

 

Changes to Existing Certificates and Notices

 

Certificate of Substantial Performance of the Contract under Section 32 of the Construction Act

“(9) A certificate of the substantial performance of a contract under section 32 of the Act shall be in Form 9.” (Source) (previously in Form 6)

“9. A certificate of substantial performance (Form 9) or declaration of substantial performance under section 32 of the Act shall be published in a construction trade newspaper.” (Source)

 

Certificate of Completion of Subcontract under Subsection 33 (1) of the Construction Act

“(10) A certificate of completion of a subcontract under subsection 33 (1) of the Act shall be in Form 10.” (Source) (previously in Form 7)

 

Notice of Intention to Register a Condominium in Accordance with the Condominium Act, 1998 under Section 33.1 of the Construction Act

“(11) A notice of intention to register land described in a description in accordance with the condominium Act, 1998 under section 33.1 of the Act shall be in Form 11.” (Source) (previously in Form 24)

“10. A notice of intention to register land described in a description in accordance with the Condominium Act, 1998 under section 33.1 of the Act (Form 11) shall be published in a construction trade newspaper.” (Source)

 

Click here to access all the new and updated forms

 

There are a number of other forms prescribed by Ontario’s Construction Act.  Please take note of the following: 

 

4. Are there any changes to lien and holdback timelines that I should be aware of?

According to the Ministry of the Attorney General of Ontario:

There are just a couple of hand-picked items from the complete announcement by the Ministry.  We urge you to read the complete announcement to ensure that you understand all relevant changes at www.attorneygeneral.jus.gov.on.ca/english/construction_law_in_ontario.php. 

 

5. How do I determine if the old rules or the new rules apply to a particular contract / improvement?

The Ministry of the Attorney General of Ontario presents the following high level summary of the applicable transition rules:

 

The Ministry further states, “The transition rules are set out in section 87.3 of the amended legislation. Please refer to the legislation and consult a lawyer to determine how the rules apply to your situation.”

Please refer to Section 87.3 of the Construction Act for further details.

 

6. Where can I find more information about the changes and the new rules?

We have put together a list of online resources for your convenience, which you can use to familiarize yourself better with the changes and the new rules: