2018 was an important year for the construction industry as the Construction Lien Act was substantially amended and renamed the Construction Act. As of July 1, 2018, a large majority of the amendments in the Construction Act are now in force. The amendments will apply to any project where:
- The contract or subcontract for the improvement was entered into after July 1, 2018;
- The procurement process for the improvement was commenced by the owner after July 1, 2018; or
- The premises are subject to a leasehold interest and the lease was first entered into after July 1, 2018.
Projects that do not meet the above mentioned criteria shall still be administered under the old Construction Lien Act.
Adjudication under Ontario’s Construction Act
Changes regarding the adjudication process were also put in place under the new Construction Act.
What is Adjudication?
Adjudication is a dispute resolution process that allows disputants to present their arguments to an independent adjudicator, who then makes a decision that can be filed with the court.
Adjudication is designed to help workers and businesses be paid on time and to resolve payment disputes. Adjudication and prompt payment provisions of the Construction Act came into force on October 1, 2019.
Certain disputes can now be referred to adjudication, including:
- The valuation of services or materials;
- Payments under a contract, including in respect of a change order;
- Notices of non-payment;
- Holdbacks; and
- Any other matter that the parties to the adjudication agree to.
Benefits of adjudications are:
- Quick: a decision will be made in 39 to 46 days (unless the parties agree to an extension).
- Cost-effective and relatively inexpensive.
- Meant to keep cash flowing: payments ordered must be made within ten days.
- Available as a right: any party to a construction contract can commence an adjudication without the other party’s consent.
Adjudications must be commenced through the Ontario Dispute Adjudication for Construction Contracts (ODACC), the body responsible for administering adjudications and training and qualifying adjudicators.
ODACC is currently offering the adjudicator training live online. For information about training for adjudicators, click here.
To learn about all the new changes under the Construction Act, visit our informative blog post. OSPE will keep updating our members about their new rights under the Construction Act.