There is no replacement for proper legal advice tailored to your individual needs. That said, Cunningham Swan is working to keep our clients and the Kingston community informed of business and other legal considerations arising during the evolving COVID-19 response. Updates will follow on our blog. Receive the latest update through our twitter account.
Cunningham Swan’s staff and lawyers are equipped to work remotely and we remain able to serve your needs with continued service should a physical office closure become necessary.
April 14, 2020 – IMPORTANT UPDATE – Construction Act limitation periods are no longer suspended
The March 20th suspension of limitations periods in the Province of Ontario has been lifted in respect of limitation periods and procedural timelines under the Construction Act. What this means is that effective Thursday, April 16, 2020, parties whose disputes are subject to the procedural and other requirements of the Construction Act must move forward with their dispute as before the COVID emergency. Of importance, with the lifting of the suspension on April 16th, parties will have the same amount of time to meet deadlines that had been remaining before the suspension began on March 16, 2020. Parties to a construction dispute must immediately determine how the lifting of suspension periods might impact their lien and/or claim or dispute generally.
UPDATE: March 21, 2020 – Limitation Period Update
On March 20, 2020, the Ontario government made an Order under s. 7.1 of the Emergency Management and Civil Protection Act suspending limitation periods and procedural time periods in Ontario. The suspension is stated to last for the duration of the emergency that has been declared within the province and subject to any renewal as provided for by the Act.
In our view, the suspension order would apply to the timelines required for registration and perfection of construction liens. That said, as the COVID-19 situation evolves, we recommend that both potential lien claimants and owners seek legal advice on their particular circumstances and potential strategy relating to payment disputes. In the present climate, owners must carefully consider maintenance and payment of holdback.
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Construction Liens & Delayed Payments – Limitation periods aren’t suspended during COVID-19
The federal and provincial response to COVID-19 remains fluid and is evolving. It is unclear whether Ontario’s declaration of a public emergency and its immediate impact on identified workplaces will expand to other forms of business and locations, including construction and job sites. As it stands, we are seeing an increase in concerns over the potential for delayed payments on construction projects in light of COVID-19.
Contractors and owners should be aware that the suspension of the courts in Ontario has not otherwise impacted limitation periods. This remains true for liens that might arise under the Construction Act (formerly the Construction Lien Act). In contingency planning around COVID-19, it would be useful to recall the timelines that remain applicable and recall the process of preserving and perfecting construction liens.
Generally speaking, if your construction contract was entered into after July 1, 2018, then you have a time period of 60 days in which to register a lien against the property where the improvements were made. The lien period was extended from the previous time limit of 45 days. Registration of the lien is known as preserving the lien.
Cunningham Swan remains equipped to move quickly and register liens on an urgent basis. That said, the greater the advance notice of a potential need, the better.
Once a lien is preserved, the next deadline is issuance of a Statement of Claim and registration of a Certificate of Action on title to the property. This is known as perfecting the lien. A lien must be perfected within 90 days of its preservation (an increase from the previous 45-day time limit). The present suspension of court operations under COVID-19 has not suspended our ability to issue claims to perfect the lien.
In every instance, the following information will be necessary for a lien to the registered:
- Claimant: The name and address for service of the person claiming the lien
- Owner: The name and address of the owner of the premises
- Contracting Party: The name and address of the person for whom the services or materials were supplied
- Description: A description of the services/materials supplied and the time within which they were supplied
- Contract Price: The contract or subcontract price
- Amount Claimed: The amount claimed for the services or materials that have been supplied
- Description of Land: A description of the premises sufficient for registration if the lien attaches to the premises, or the address or other identification of the location of the premises where the lien does not attach to the premises.