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How to lay out payment release

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What is the holdback in Ontario Construction Act?

Construction Act Holdback Every payer in a construction project (such as the owner paying the contractor, or the contractor paying subcontractors) must hold back 10% of every payment made as a form of security for any liens that may be registered against the project.

How long is the construction lien period in Ontario?

A preserved lien will expire unless perfected within 90 days. However, it is important to note that the 90-day period does not run from the date it was preserved but from the date of the projects completion.

What are progress payment terms?

What Is a Progress Payment? In the construction industry, a progress payment is a partial payment made to a business or contractor after the completion of a predefined stage of work for example, a demolition or the addition of a roof and siding.

How do I discharge a construction lien in Ontario?

The Construction Lien Act provides that a preserved or perfected lien and certificate of action may be deleted from title by the registration of a release of the lien by the lien claimant, by a court order discharging the lien and/or action or by a court order vacating the lien and/or action.

Has Bill 37 passed?

On February 25, 2022, the Government announced that Bill 37 will come into force on August 29, 2022. Miller Thomson has been closely following the development of Bill 37: The Builders Lien (Prompt Payment) Amendment Act) (Bill 37) which first received royal assent on December 9, 2020.

What is annual holdback release Ontario?

The Construction Act also allows for annual or phased release of holdback, which allows funds to be released sooner on large projects. Payers can retain holdbacks in other ways. A payer may instead obtain a letter of credit, or may opt for a Demand- Worded Holdback Repayment Bond.

What is release of holdback payment?

Release of Holdbacks When the Certificate of Substantial Completion is issued to the contractor, the holdback amount should be released as part of the payment made to the contractor, provided it is not required for the purposes of the contract.

When can a construction lien holdback be released Ontario?

The holdback is held until the opportunity for all liens to be claimed under the Act has expired, which includes up to the point of substantial completion.

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