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Construction Law

How do contractors and subcontractors recover payment?

Construction payment disputes are governed by lien legislation with deadlines that are short, statutory and unforgiving - miss the period to preserve a lien and that security is gone permanently, whatever the merits. Preserving lien rights is therefore the first task, ahead of negotiating. Several provinces have also introduced prompt payment and adjudication regimes that resolve disputes far faster than court.

What to do next

  1. Establish your lien deadline today

    The period to preserve a lien runs from a defined trigger - last supply of services or materials, substantial performance, or certification - and it is measured in weeks. Calculate it before doing anything else, and get advice if the trigger is unclear.

  2. Preserve and then perfect

    Preserving a lien is registering it; perfecting it requires commencing an action within a further short period. A preserved but unperfected lien expires. These are two deadlines, not one.

  3. Check whether prompt payment and adjudication apply

    Ontario and other provinces have prompt payment rules with mandatory timelines for payment or a written notice of non-payment, and interim adjudication that produces a binding determination in weeks rather than years.

  4. Assemble the payment record

    Contract or purchase order, change orders and approvals, invoices and delivery records, site photographs and daily reports, and every request for payment with the response. Change orders performed on a verbal instruction are the most commonly disputed item.

  5. Assess who can actually pay

    A lien attaches to the property and to holdback funds, which is why it often works where a judgment against an insolvent contractor would not. Establish the payment chain before choosing a route.

Frequently asked questions

What happens if I miss the lien deadline?

The lien is lost permanently. A breach of contract claim may remain, but without the security over the property - which is usually what made recovery realistic.

Can I lien if I am a subcontractor?

Lien legislation generally protects subcontractors and suppliers, not only the general contractor. The trigger date for your lien depends on your own last supply.

What is adjudication?

An interim binding determination on payment, available in provinces with prompt payment regimes, decided in weeks. It is far faster than litigation and increasingly the practical route.

Which lawyer handles this?

A construction lawyer. Given the deadlines, get advice immediately rather than after negotiation fails - by then the lien period may have run.

This is general information, not legal advice. Laws vary by location and every situation is different — speak with a qualified lawyer about your specific circumstances.

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By submitting, you agree to be contacted about your inquiry. This is not legal advice and does not create a lawyer–client relationship.

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