OSPE - The Voice - Fall 2020 - 34

INDUSTRY

b) The procurement process for the improvement was commenced
by the owner after October 1, 2019; and
c) The premises are subject to a leasehold interest and the lease
was first entered into after October 1, 2019.
Prompt Payment
The Prompt Payment rules are outlined in Part I.1, sections 6.1 to
6.9 of the Act.
There are several key concepts to understand before we continue
our discussion. First, a "contractor" in the Act is any individual
or company, including an engineer or engineering firm that has a
direct contract with the owner. A "subcontractor" is any individual
or company that has been contracted by a person or company, but
is not the owner. Second, only a contractor can provide a proper
invoice. Third, the characteristics of a "proper invoice", defined in
section 6.1 of the Act, include: the contractor's name and address;
the amount payable; the invoice date; name, title, telephone
number and address of the recipient; the period when services and
materials were supplied; the authority under which the services or
materials were supplied (i.e. contract, PO, extra); and description of
the services or materials and payment terms. A proper invoice shall
be given to an owner monthly unless the contract states otherwise.

Notice of Non-Payment" within 14 days after the receipt of a proper
invoice. If only a portion of the amount claimed is disputed, the
non-disputed amount must be paid within 28 days after receipt of
the proper invoice. If the owner does not pay, the contractor can
send its subcontractor a form called a "Contractor Notice of NonPayment Where Owner Does Not Pay", similarly a subcontractor
can send its subcontractor a form called a "Subcontractor Notice
of Non-Payment Where Owner Does Not Pay". If the owner pays, a
contractor or subcontractor can dispute amounts owed to parties
below them in the construction pyramid by sending a "Contractor
Notice of Non-Payment if Dispute or Subcontractor Notice of NonPayment if Dispute". The forms must be in the prescribed form,
which are available online at http://ontariocourtforms.on.ca/en/
construction-lien-act-forms/. The forms must be delivered by
certified or registered mail to the recipient's last known address
or as stated in the contract. The forms require the disputing party
to specify the amount of an invoice that is not being paid and to
detail the reasons for non-payment. If any party disputes payment,
the matter must be referred to adjudication.
Adjudication
The Adjudication rules are outlined in Part II.1, sections 13.1 to
13.23 of the Act.

Payment Timelines
The mandatory process aims to provide a fast means to interim
Prompt Payment requires that an owner of a construction project
decisions during the completion of a construction project. The
pay its contractor's invoice within 28 days after the receipt of a
types of matters that can be referred to adjudication are outlined at
proper invoice. The contractor must pay its subcontractor, who
section 13.5 of the Act. The government has set up an organization
provided services that were also included
to carry out this program, the Ontario
Dispute Adjudication for Construction
in the proper invoice given to the owner,
Contracts (the "ODACC"), which has
within 7 days of receipt of payment
from the owner or within 35 days if no
implemented procedures and appointed
Following receipt of a
payment is received from the owner.
adjudicators for the program. The ODACC
proper invoice, if an
The subcontractor then must pay its
outlines the process and has a registry
subcontractor, who provided services that
of adjudicators on its website at https://
owner does not to pay
were also included in the proper invoice,
odacc.ca/en/adjudication-process/.
the contractor in full, it
within 7 days of receipt of payment from
the contractor or 42 days if no payment is
The Process
must send a form called
received from the subcontractor.
Pre-adjudication process - Notice of
an "Owner's Notice of
Adjudication: The claimant provides a
Notices of Dispute
Notice of Adjudication to the respondent
Non-Payment" within 14
and ODACC. There is no prescribed form
Following receipt of a proper invoice, if
days after the receipt of a
an owner does not to pay the contractor in
for the Notice, but the Act requires the
following information to be stated: the
full, it must send a form called an "Owner's
proper invoice.

THE VOICE Fall 2020

http://ontariocourtforms.on.ca/en/construction-lein-act-forms/ http://www.odacc.ca/en/adjudication-process/

OSPE - The Voice - Fall 2020

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