Contracts and builders' liens in Alberta

Electrical contractors are paid last and paid late more often than most businesses. The work is buried in walls, the owner pays the general contractor, the general contractor pays the trades, and every step in that chain is a chance for money to stop moving. Alberta's answer is the Prompt Payment and Construction Lien Act, which sets payment deadlines, gives unpaid parties a lien against the land, and requires holdbacks to protect everyone down the chain. A master electrician who runs jobs needs to know it well, and the business and law content of the exam can reach it.

The Act replaced the former Builders' Lien Act and came into force on August 29, 2022; contracts and subcontracts entered into on or after that date must conform to it. The summary below reflects the Act and published legal commentary as of late 2026. It is an overview for exam preparation and day-to-day awareness, not legal advice. For a real dispute, read the Act and its regulations and get a lawyer's advice early, because the deadlines are strict.

Contracts first

Most payment problems are really contract problems. A clear contract says what work is included, what it costs, how changes are priced and approved, when invoices are issued, when payment is due and what happens if there is a dispute. In construction, contracts are often based on standard forms, such as those published by the Canadian Construction Documents Committee, with supplementary conditions added by the owner.

For an electrical subcontractor, the key clauses are the scope of work and exclusions, the schedule, change orders, payment terms, holdback, warranty, and any clauses that try to shift risk, such as pay-when-paid language or broad indemnities. Under the prompt payment rules, contract terms that conflict with the Act's payment requirements generally do not override them, which is one reason the Act matters.

Gord's rule for change orders is the one every master electrician should adopt: no extra work without a written change, signed by someone with authority, before the work is done. Verbal changes are how a profitable job becomes a loss and a payment dispute.

Prompt payment

The prompt payment part of the Act sets deadlines that run down the contracting chain.

• Contractors must give the owner a proper invoice at least every 31 days, unless the contract provides otherwise in ways the Act allows.
• The owner must pay a proper invoice within 28 days of receiving it.
• If the owner disputes an invoice, it must give a notice of dispute within 14 days of receiving the invoice, stating its reasons, and must still pay any undisputed amount within the 28 days.
• A contractor that receives payment must pay its subcontractors within 7 days, and the same pattern applies further down the chain.
• Interest can accrue on amounts that are paid late.

Disputes about payment can be referred to adjudication, a fast process run by an adjudicator under the Act's framework. An adjudicator's decision is binding in the meantime unless the parties agree otherwise or a court or arbitrator later decides differently. Judicial review must be applied for within 30 days of the decision, and in some circumstances a decision can be registered as a court order.

from datetime import date, timedelta

def payment_dates(invoice_received):
    dispute_by = invoice_received + timedelta(days=14)
    owner_due = invoice_received + timedelta(days=28)
    sub_due_if_paid_on_time = owner_due + timedelta(days=7)
    return dispute_by, owner_due, sub_due_if_paid_on_time

for inv in (date(2027, 3, 3), date(2027, 11, 20)):
    d, o, s = payment_dates(inv)
    print('invoice', inv, '| dispute by', d, '| owner pays by', o, '| sub paid by', s)

invoice 2027-03-03 | dispute by 2027-03-17 | owner pays by 2027-03-31 | sub paid by 2027-04-07
invoice 2027-11-20 | dispute by 2027-12-04 | owner pays by 2027-12-18 | sub paid by 2027-12-25

The code applies the basic periods. Real cases can involve non-business days, contract terms and other details in the Act, so treat it as a planning aid.

Holdback

Under the Act, the owner must hold back part of each payment, and each contractor holds back from its subcontractors in the same way. The holdback is 10 for every 100 dollars of the value of the work, a tenth of each payment. It forms part of the fund that protects lien claimants, and it is released once the time for registering liens has passed without claims, or once claims are dealt with, under the Act's procedures. Phased release of holdback during a long project is allowed only if the contract provides for it and the project lasts over a year and is worth over 10 million dollars.

For a subcontractor, holdback is real money tied up for months. On a 300,000 dollar subcontract, holdback is 30,000 dollars, and Parkland Valley will not see it until the lien period after substantial performance has run. Good cash flow planning counts on that delay.

Liens

A lien is a claim against the owner's interest in the land for the value of work or materials supplied to improve it. In Alberta, a lien is registered at the Land Titles Office against the property. It gives an unpaid contractor, subcontractor, worker or supplier security for its claim, and it puts pressure on the owner and the parties above to resolve the debt, because a lien clouds the title.

The most important thing to know about liens is the deadline. Under the Act, a lien must generally be registered within 60 days, an increase from the 45 days under the old Act. For certain work, such as oil and gas well sites and the supply of concrete other than ready-mix, the period is 90 days. The period is usually counted from the last day the claimant supplied work or materials, or from another event the Act specifies, so keep accurate records of the last day on site. The minimum amount for a lien is 700 dollars.

A lien that is registered late is invalid. A lien that is registered must then be followed by a lawsuit within the time the Act allows, or it lapses. Those deadlines are why lawyers tell contractors to call early, not after the 59th day.

Priya's first lien

Two years ago Parkland Valley wired a custom home for a builder who went quiet after the drywall went up. Gord kept dated daily reports, so he knew the last day his crew supplied work. When the builder missed two payments, his lawyer registered a lien on day 41, well inside the period. The builder's lender, seeing the lien on title, made sure Parkland Valley was paid within a month.

Priya asks what would have happened if Gord had waited until day 65. Denise answers for him: nothing good. The lien would have been out of time, and Parkland Valley would have been left with a contract claim against a builder who might not have had the money to pay. The deadline is the point of the whole system.

Liens and residential work

Liens are available on residential projects too, but owners of homes deal with prepaid contracting rules, consumer protection rules and, on new homes, warranty programs as well. A master electrician who does residential work should understand how these interact: for example, how holdback applies when a homeowner hires the electrical contractor directly, and how deposits are handled under the Consumer Protection Act. Published guides from Alberta law firms describe the overlap between prompt payment and prepaid contracting in residential renovations, and they are worth reading before you set up your standard contract.

A dispute that went to adjudication

Last year a general contractor refused to pay part of Parkland Valley's invoice on a strip-mall job, claiming that the lighting layout had been changed without approval. Parkland Valley had a signed change order. The owner had paid the general contractor, but the general contractor withheld the disputed amount without giving a proper notice of dispute. Gord's lawyer advised that the matter could go to adjudication under the Act. Faced with an adjudication it was likely to lose, the general contractor paid within two weeks.

The lesson for Priya is that the prompt payment rules give a subcontractor real tools, but only if its paperwork is in order. The signed change order and dated invoices made the claim strong. Without them, the dispute would have become a costly argument about who said what on site.

Keeping the records that protect you

Every payment and lien right in this lesson depends on dates and documents. Keep daily reports that show who was on site and what work was done. Keep every signed change order. Keep copies of invoices with the date they were delivered. Record the last day you supplied work or materials on each project, because the lien clock may run from it. Keep correspondence about disputes. Parkland Valley's site reports are short, a few lines a day on a phone app, but they have won the company every payment dispute it has had.

Records also help with holdback release. When the lien period after substantial performance passes, the holdback should be released under the Act's procedures. A subcontractor that can show exactly when its work was finished, and that no liens were registered, is in the best position to have its holdback paid promptly.

Liens and public projects

Liens are claims against land, and some public land cannot be liened in the ordinary way. For public projects, the Act and other laws provide different protections, and labour and material payment bonds, covered in lesson 8, are often the main security for unpaid subcontractors and suppliers. Before working on a public project, check the payment security: is there a payment bond, who is the surety, and how is a claim made? The answer decides what to do if payment stops.