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Builders’ Lien Act reworked into the Prompt Payment and Construction Lien Act

Alberta’s Builders’ Lien Act has been renamed the Prompt Payment and Construction Lien Act (the PPCLA), coming into force on August 29.

Albert has also released the accompanying regulations to the PPCLA, being the Prompt Payment and Adjudication Regulation (the PPCLA Regulation) which prescribes a new adjudication regime under the PPCLA , and the Builders’ Lien Forms Amendment Regulation (Forms Regulation) which prescribes various forms of notices referenced in the PPCLA.

Alberta’s new prompt payment regime does not affect obligations of a contractor or subcontractor to pay employees. To learn more, click here.

The PPCLA and its accompanying regulations follow a growing trend across Canada to adopt prompt payment and adjudication with the objective of facilitating timely payment down the construction pyramid.

Prompt Payment Framework

The PPCLA mandates timelines for payments down the construction pyramid that are triggered by receipt of a “proper invoice” given by a contractor to an owner. Once the proper invoice is received by the owner, there are different timelines for payments as follows (subject to exceptions described herein):

• by an owner to a contractor (within 28 days after receiving the proper invoice),
• by a contractor to a subcontractor (within 7 days after contractor receives payment from the owner), and
• by a subcontractor to its subcontractor (within 7 days after subcontractor receives payment from the contractor).