The Government of Alberta recently introduced rules that will ensure that builders pay their trades ‘on time’ and without delay. Bill 37 allows contractors and subcontractors to file a lien against a project owner’s property if their invoices are not paid promptly.

Some of the highlights of this legislation are:

  • General Contractors must issue proper invoices to project owners every 31 calendar days;
  • Property owners must pay the invoice within 28 calendar days;
  • Once the payment is received, contractors must pay subcontractors within 7 days;
  • Parties cannot opt out of payment timelines (i.e. by ‘agreeing’ to longer payment terms);
  • Parties will have 14 calendar days to dispute an invoice.

Until this legislation passed (on December 20, 2020), Alberta had no formal adjudication process for the construction industry, meaning that payment disputes had to go through the court system, sucking up valuable time and resources from all parties. Bill 37 establishes a new adjudication process for the construction industry which, regardless of the outcome of the adjudication, includes the option for parties to file a lien against the property owner with Service Alberta’s Land Titles Office. There are other changes with regards to the timing of filing a Lien as well as the timing of the release of holdback funds.

On the surface, these changes appear drastic, particularly in an industry where cash flow is the single biggest challenge to growing construction companies. At Achen Henderson, we view this as a great ‘leveler’ between ‘mega’ builders and ‘the little guy’. This is an opportunity for general contractors and construction companies to review their proposal and billing practices to create clarity in their businesses – something that was simply not possible for most in our competitive construction industry without a level playing field.

At Achen Henderson, we specialize in helping construction companies understand and manage their cash flow from proposal to delivery. Is it time for your company to rethink the way it does business?

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For more information, you can visit the Government of Alberta’s website (here) or reach out to us to find out how we can help your construction company thrive.