Government amends Regulation suspending limitation periods to allow for release of holdback under Ontario’s Construction Act

April 15, 2020 | Dražen F. Bulat

On April 1, 2020 we wrote about O.Reg. 73/20 which suspended limitation periods imposed by any Ontario law retroactive to March 16, 2020. We noted that if the effect of O. Reg. 73/20 applies to suspend the time for liens to be registered under Ontario’s Construction Act, that would mean liens would not expire and owners (including landlords) who release holdback to contractors may be at risk of having to pay the holdback again if liens are registered later. In the circumstances, our view was that the safer course of action for owners, lenders and landlords was to consider not releasing the holdback until the Courts or the Government clarified the effect of O. Reg. 73/20.

Late on April 9, 2020 the Government did just that. It issued O. Reg. 137/20 which amends O. Reg. 73/20 and provides that “on and after April 16, 2020” the provisions suspending limitation periods do not apply to the Construction Act or its Regulations.

The effect of the amendment is that liens that would otherwise have expired on or after March 16, 2020 (the date O. Reg. 73/20 took effect) have been extended by a total of 31 days. Or, put another way, if counting the number of days to register a lien, when you get to March 15 the next day will be April 16.

The amendment to O. Reg. 73/20 also means that owners (including landlords) will be able to release the holdback to contractors after accounting for the 31-day suspension from March 16 to April 15.

If you have questions or would like to discuss issues relating to your project, including issues relating to registration of liens or release of holdback, please contact a member of our construction group.

 

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