This bulletin outlines recent amendments affecting holdback release, adjudication, and prompt payment obligations. Owners, contractors, and subcontractors should ensure internal systems reflect these revised timelines.
1. Annual Holdback Release Regime
- Owner must publish a ‘Notice of Annual Release of Holdback’ within 14 days after each contract anniversary.
- The notice must state the amount of accrued holdback to be paid and the intended payment date.
- Owner must wait 60 days to release the holdback. If no liens have been registered at Day 60, Owner can release the holdback.
- Holdback must be paid no earlier than Day 60 and no later than Day 74 after publication if no lien is registered.
- Applies to all holdback accrued prior to the anniversary.
Holdback Release Timeline
- Contract Anniversary: Anniversary occurs
- Within 14 Days: Owner publishes Notice
- Day 60 After Notice: Owner can release holdback if no liens have been registered
- Days 60–74: Mandatory payment window for holdback
Transition
- For contracts entered into after January 1, 2026, the annual holdback release will apply on the first anniversary of the contract in 2027.
- For contracts entered into prior to January 1, 2026, the annual release of holdback will begin on the second anniversary of the contract following January 1, 2026.
- For example, if a contract was entered into on March 10, 2025, the annual release of holdback will not be required until the second anniversary following January 1, 2026 (i.e.: March 10, 2027).
2. Expanded Adjudication Framework
- Ontario Regulation 264/25 now governs adjudication scope.
- Regulations may permit adjudication between parties to different contracts relating to the same improvement.
- Parties involved in multiple related adjudications may request consolidation.
- Notice of adjudication must be given within 90 days of completion, abandonment, or termination of the contract, unless otherwise agreed.
3. Proper Invoice & Notice of Non-Payment
- Invoice deemed proper unless owner provides written notice of deficiency within 7 days of receipt.
- Deficiency notice must specify the issue and what is required to correct it.
- Notice of Non-Payment must be delivered within 14 days after the invoice is deemed proper.
- Effectively provides a maximum 21-day window from receipt of an invoice to issue a Notice of Non-Payment.
Invoice & Non-Payment Timeline between Owner and General Contractor
- Day 1: Invoice received
- Day 7: Deadline to notify of deficiency in invoice (i.e. invoice is not a proper invoice)
- Day 14 (Maximum): Deadline to issue Notice of Non-Payment
- Day 28: Invoice must be paid where a Notice of Non-Payment has
Key Practical Considerations
- Owners must track anniversary dates and mandatory holdback release deadlines.
- Invoices must be reviewed promptly to meet the 7-day deficiency window.
- Failure to deliver a timely Notice of Non-Payment within 14 days triggers payment obligations.
- Expanded adjudication increases the likelihood of consolidated multi-party disputes.
This bulletin is provided for general information only and does not constitute legal advice. Please contact our Construction Law Group at Barriston LLP for advice regarding your specific project and to learn about other amendments to the Construction Act that may apply to your project(s).
Written by Jacklyn Tuckey, Nathan Stadig, and Angela Gray