Good News for the Construction Industry! The Construction Lien Act (CLA) is 34 years old and due for an upgrade. By the end of this year, it is expected that the CLA will be amended to include:
- The adoption of a prompt payment regime with a 28 day payment window between an owner and general contractor and a further seven day window for each level down the construction pyramid, triggered by the issuance of a proper invoice.
- Mandatory and immediate dispute resolution through the appointment of an adjudicator. The whole adjudication process is to take 30 days.
- Early or phased holdback release and the mandatory release of holdback, subject to claims for setoff. Holdback will remain at 10% of the contract price.
There are extensive other proposed recommendations including mandatory bonding for public projects, changes to construction trusts, and industry education.
The proposed changes have been welcomed by the construction industry and most foresee these amendments passing quickly through the legislature. More information will be forwarded to you over the next few months. If you have questions at this time, please feel free to contact us.
This material does not constitute legal advice. Readers are urged to consult their professional advisers prior to acting on the basis of material in this publication.