Payment records, prompt payment and adjudication

Cash is the lifeblood of a construction company, and documents are how cash moves. On the 25th of every month, Elena Vasquez submits Brightwater's payment application for Westgate. It is built from a schedule of values, supported by progress photos, the updated schedule, the change order log, lien and payment paperwork from subcontractors, and a cover invoice in the form the contract and the law require. If any piece is missing or wrong, the application can be rejected or delayed, and Brightwater, its subcontractors and their suppliers all wait for their money. If it is right, the money arrives on time, and the law gives Brightwater strong remedies if it does not.

This lesson covers the documents that drive payment: the schedule of values, the progress application and its support, holdback, the paperwork that shows subcontractors are being paid, and the records that the prompt payment and lien laws require. It also shows how payment documentation feeds the fast dispute processes that now exist for unpaid amounts.

The schedule of values

The schedule of values breaks the contract price into parts against which progress is measured and paid. It is prepared by the contractor at the start of the project and accepted by the contract administrator. Every payment application afterwards reports the percentage complete of each line.

A good schedule of values is detailed enough that progress can be checked, but not so detailed that it becomes a burden. Lines should match how the work is actually built and how subcontracts are let. Brightwater separates supply and installation for major prefabricated items, so that materials delivered to site or stored off site can be valued separately where the contract allows payment for them. Front-loading, putting too much value into early lines to improve cash flow, is tempting but damages trust, and experienced reviewers spot it quickly.

The payment application

Under CCDC 2 2020, the Contractor applies for payment monthly as the Work progresses, and the Consultant determines the amount owing and issues a certificate for payment. Ontario's Construction Act adds requirements of its own: the contractor's application must be a proper invoice, which the Act defines by its required contents, such as the contractor's name and address, the date and the period covered, a description of the services and materials supplied, the amount payable and the payment terms. Westgate's supplementary conditions require the proper invoice to be given to the library board and the Consultant on the same day.

Brightwater's application package for Westgate always contains the same items.

• The invoice or application form, with the period, amounts by schedule of values line and the totals.
• Approved change orders, listed separately with their own percentage complete.
• Stored materials, if claimed, with invoices, insurance and proof of title, and for off-site storage, the location and identification.
• Progress photos and the updated schedule, so the reviewer can check percentages against reality.
• Evidence that subcontractors and suppliers have been paid from the previous payment, in the form the contract requires.
• A reconciliation of holdback withheld and released.

Before submission, Elena walks the site with the subcontractors' project managers and agrees percentages line by line, then walks it again with Simone Achebe of Arden Moss before the formal application goes in. Agreeing the numbers before the paperwork is submitted means the formal review is quick and disputes are rare.

Holdback and the statutory declaration

Ontario's Construction Act requires every payer on the construction pyramid to retain a holdback of 10 percent of the value of services and materials supplied, as security for lien claimants below. Since January 1, 2026, holdback must also be released annually on longer projects: the owner publishes a notice of annual holdback release within 14 days after each contract anniversary and pays the accrued holdback 60 to 74 days later, unless a lien is preserved or perfected in the meantime, and each tier then releases holdback down the pyramid. Holdback is also released after substantial performance once the lien period has passed. On Westgate, which started before 2026, the transition rules delay the first annual release, and Jun tracks the dates in the payment log.

Owners also want proof that the contractor is paying those below it. Under CCDC 2 2020, each application after the first is supported by a statutory declaration, commonly on the CCDC 9A form, in which the contractor declares under oath that it has paid its subcontractors and suppliers the amounts due from the previous payment, subject to holdback. A false declaration is a serious matter, so Brightwater's controller checks the payables ledger before Elena signs.

Prompt payment

Ontario's prompt payment rules, in force since 2019 and revised in 2026, set a clock that starts when the owner receives a proper invoice. The owner must pay within 28 days, unless it gives a notice of non-payment, in the prescribed form, within 14 days, stating the amount not being paid and the reasons. Since January 1, 2026, an invoice is deemed proper unless the owner notifies the contractor in writing of what is missing within 7 days of receiving it. A contractor that is paid must pay its subcontractors within 7 days; if it is not paid, it must give its own notice of non-payment within the time the Act sets and, in some cases, undertake to refer the dispute to adjudication. Interest runs on late amounts.

The documentation lesson is the same in both countries. Payment rights now turn on dates: when an invoice was received, when a notice was given, what it said. Brightwater sends every invoice with proof of delivery, logs the date received, and diarizes each deadline. When a notice of non-payment or withholding arrives, the date and contents are checked against the law immediately, because a late or vague notice may mean the amount must be paid in full.

# Monthly payment application from the schedule of values
sov = {  # line: (value, percent complete to date)
    '03 Concrete': (6480000, 1.00),
    '06A Timber supply': (7950000, 0.85),
    '06B Timber install': (2640000, 0.60),
    '08 Curtain wall': (4120000, 0.25),
    '21-23 Mechanical': (9860000, 0.35),
    '26 Electrical': (5310000, 0.30),
}
rate = 0.10
earned = sum(v * p for v, p in sov.values())
held = earned * rate
previous_net = 15000000
for line, (v, p) in sov.items():
    print(f'{line:20} {p:>5.0%}  ${v * p:>12,.0f}')
print(f'Earned to date   ${earned:,.0f}')
print(f'Less 10% held    ${held:,.0f}')
print(f'Due this month   ${earned - held - previous_net:,.0f}')

03 Concrete           100%  $   6,480,000
06A Timber supply      85%  $   6,757,500
06B Timber install     60%  $   1,584,000
08 Curtain wall        25%  $   1,030,000
21-23 Mechanical       35%  $   3,451,000
26 Electrical          30%  $   1,593,000
Earned to date   $20,895,500
Less 10% held    $2,089,550
Due this month   $3,805,950

Liens and adjudication

If payment is not made, lien and adjudication rights depend on records. Under Ontario's Construction Act, a lien generally must be preserved within 60 days after the earlier of certain events, such as publication of a certificate of substantial performance or the last supply of services or materials, so the dates of last supply must be recorded carefully. Adjudication, run through Ontario's designated adjudication authority, decides payment disputes on short deadlines, mostly on documents. An adjudicator will want the contract, the invoices, proof of when they were delivered, any notices of non-payment, the change records and the evidence of work done. A party that cannot produce these quickly is at a serious disadvantage.

The common thread is the date of last supply or last work, which daily reports, delivery tickets and timesheets must capture accurately. Brightwater's subcontracts require subcontractors to report it, and Jun records it for each subcontractor as their work finishes.

Stored materials

Mass timber and curtain wall units are expensive and are often made months before they are installed. Suppliers want to be paid when the product is finished, not when it is lifted into place, so contractors ask owners to pay for materials stored on site or in a warehouse. Owners will do this only if the documents prove that the materials exist, are identified for the project, are insured and will belong to the owner once paid for.

On Westgate, the CLT panels for levels 3 and 4 sat in the supplier's yard for six weeks. Before each payment application, the supplier sent photos of the stacks with project tags, and Simone Achebe visited once to confirm them. Each month Jun reconciled the panels claimed as stored against the panels installed, so that nothing was paid for twice.

The payment log

Behind every application sits Brightwater's payment log, a single register of every invoice going up the pyramid and every payment coming down. For each application to the owner it records the date sent, proof of delivery, the date received, any deficiency or withholding notice, the amount certified, the amount paid and the date paid. For each subcontractor it records the same in reverse, together with holdback, waivers or declarations, and the date of last supply. The log makes the statutory deadlines visible. A glance shows which payments are late, which subcontractors must be paid within the week, and which notices are due. It is also the first document an adjudicator, arbitrator or court will want to see if payment becomes a dispute, because it tells the story of the money in one place.

Subcontractors keep their own logs, and the two should agree. Elena's team sends each subcontractor a monthly statement showing what Brightwater has received for their work, what it has paid and what it is holding. Discrepancies raised early are almost always clerical; discrepancies discovered at the end of the job often become claims.