Stronger construction rules will bolster industry

A new prompt payment framework ushers in payment timelines and a dispute resolution process for Alberta’s construction sector.

Formerly known as the Builder’s Lien Act, the Prompt Payment and Construction Lien Act is now in force. The new act creates rules for the timing of payments and sets out a streamlined adjudication process for disputes related to payment or work performed as an alternative to court.

Prompt payment is introduced by mandating owners to provide payment to their contractors within 28 days of receiving a proper invoice for construction services and requires that those contractors who receive payment from an owner subsequently pay their subcontractors within seven days.

The new act applies to all private construction contracts in Alberta created on or after Aug. 29, 2022. Current contracts that extend past two years must become compliant with the new rules by Aug. 29, 2024.