PROMPT PAYMENT Bill 27 ensures quicker compensation As any experienced construction profes sional is aware, delays and unexpected complications are common on most proj ects, large and small. These delays not only affect the overall completion date, but they also often mean that contractors and subcontractors will be paid later than planned. Sometimes payment is held back until the full project is done, meaning professionals can be left waiting months or even years be fore being compensated for their services or materials. The Alberta government has recently taken steps to address this with the imple mentation of Bill 27: The Builders’ Lien (Prompt Payment) Amendment Act, 2020. One of the key pieces of the legislation is a prompt payment process that should go a long way in ensuring contractors and
sub-contractors receive compensation in a timely fashion.
WHAT WAS THE PROBLEM WITH PAYMENT IN THE PAST? Prior to the introduction of Bill 27, there was no time limit in place for either cus tomers, contractors, or sub-contractors to pay for work. The lack of definitive time lines created what was referred to as a “pay when paid” system, which meant that in dividual parties would only be paid for their goods or services once payment for the entire project was received. Of course, this meant that if a job was delayed, even if the delay was unrelated to a contractor’s work, that contractor may not receive funds until the delay was resolved. These types of policies put sub-contractors at a significant
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economic disadvantage. While Alberta had not yet legislated payment rules on con struction projects, other jurisdictions such as Ontario and Saskatchewan had.
28-DAY PAYMENT DEADLINE The section of Bill 27 likely to have the most noteworthy impact for people work ing in the construction industry is the in troduction of a mandate that invoices from contractors or sub-contractors must be paid within 28 days of receipt. The legislation further prohibits “pay when paid” clauses in contracts. Contractors submitting invoices for prompt payment are required to submit in voices detailing the work done or materials furnished as well as a reference to a written
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