{"id":18122,"date":"2024-10-01T10:45:36","date_gmt":"2024-10-01T14:45:36","guid":{"rendered":"https:\/\/www.millerthomson.com\/?post_type=insights&p=225043"},"modified":"2025-01-02T14:03:23","modified_gmt":"2025-01-02T19:03:23","slug":"the-prompt-payment-and-construction-lien-act-two-years-on","status":"publish","type":"post","link":"https:\/\/www.millerthomson.com\/en\/insights\/construction-and-infrastructure-law\/the-prompt-payment-and-construction-lien-act-two-years-on\/","title":{"rendered":"The Prompt Payment and Construction Lien Act<\/i>: Two years on"},"content":{"rendered":"

Introduction<\/strong><\/h2>\n

On August 29, 2022, amendments to the Alberta\u00a0Builders\u2019 Lien Act, RSA 2000, c B-7<\/em> (the \u201cBLA<\/em>\u201d) came into force and that act became the Prompt Payment and Construction Lien Act<\/em>, RSA 2000, c P-26.4\u00a0<\/em>(the \u201cPPCLA<\/em>\u201d). \u00a0The PPCLA<\/em> makes a number of amendments to the BLA<\/em>, primarily introducing the concepts of prompt payment[1]<\/a> and adjudication,[2]<\/a> in addition to more procedural elements such as extending the lien period to 60-days. At the two-year mark these additions are more familiar on Alberta projects, but we expect most parties are far from comfortable with the obligations imposed by the prompt payment timelines and the possibilities of in project construction adjudications.<\/p>\n

As of August 29, 2024, the transition period set out in in the PPCLA<\/em> has passed. The transition provisions provided that contracts or subcontracts entered into prior to August 29, 2022 were governed by the terms of BLA<\/em>, however, where a contract was in force prior to August 29, 2022 and scheduled to be in force past August 29, 2024,[3]<\/a> that contract was required to be amended within those two years to comply with the new provisions of the PPCLA<\/em>.[4]<\/a> While we anticipate that not all contracts have been amended, and the language in the transition provisions is less than clear, it is likely the case that the terms of the PPCLA<\/em> now apply to all construction agreements in Alberta, irrespective of the date entered into or the status of amendments. It is certainly the case that many parties will be operating on this assumption. On contracts pre-dating August 29, 2022, this means the new prompt payment obligations, potential construction adjudications and extended holdback periods are now in effect. Owners should be alert to these obligations, and the possibility that potential claimants will seek these remedies.<\/p>\n

Changes made by PPCLA<\/em><\/strong><\/h2>\n

Miller Thomson LLP\u2019s construction lawyers have previously written about the substance of the changes implemented as part of the PPCLA <\/em>coming into force, in particular in the posts listed below:<\/p>\n