Prompt payment for construction
The Prompt Payment Act Ontario, introduced as part of the Construction Act reform effective October 1, 2019, was designed to ensure fairness and transparency in construction payments. This prompt payment legislation sets strict timelines for when payments must be made on construction projects, helping contractors, subcontractors, and suppliers receive timely compensation for their work.
Under the Prompt Payment and Construction Lien Act, owners must pay contractors within 28 days of receiving a proper invoice, while contractors must pay subcontractors within 7 days after receiving payment. These deadlines help maintain consistent cash flow across all levels of a construction project and reduce payment disputes.
Proper Invoice Requirements
A proper invoice must include specific details as required under the Ontario Construction Act, such as:
- The contractor’s name and address
- The date of the invoice and period covered by the work
- A description of the services or materials provided
- The amount requested for payment
- The name of the person or entity the invoice is directed to
Parties can agree on adding more details to their invoices, as long as these additions do not conflict with the legislation. If no payment schedule is specified in the contract, the monthly payment cycle under the Construction Act automatically applies.
Consequences of Delayed Payments
Failure to comply with the prompt payment provisions may result in interest charges as outlined in the contract or under the Construction Lien Act. Late payments can also lead to disputes, lien claims, or adjudication proceedings.
Construction projects are often affected by delays, unexpected costs, and communication gaps between parties. That’s why having an experienced construction lawyer is essential — to help you navigate invoice disputes, enforce payment rights, and stay compliant with the prompt payment legislation.
How Juzkiw Law Firm Can Help
At Juzkiw Law 律师事务所, our team understands how vital timely payments are in the construction industry. We assist contractors, subcontractors, and owners with:
- Reviewing and drafting construction contracts
- Enforcing payment deadlines under the Prompt Payment Act Ontario
- Handling construction lien registrations and disputes
- Representing clients in adjudication or litigation cases related to non-payment
If you are facing issues with payment delays or invoice disputes under the Prompt Payment and Construction Lien Act, contact us today for professional legal advice.
Call (416) 221-2221 for a consultation with an experienced construction lawyer.
FAQs – Prompt Payment Act Ontario
It is a section of the Ontario Construction Act that sets strict timelines for payment in construction contracts, ensuring contractors and subcontractors are paid promptly.
It applies to all parties in the construction chain — owners, contractors, subcontractors, and suppliers involved in Ontario-based projects.
If payments are not made on time, the unpaid party may charge interest or start adjudication under the Construction Lien Act to recover what is owed.
A proper invoice includes key information like the contractor’s name, description of work, amount owed, and invoice date. Without it, the payment deadlines do not start.
A construction lawyer can review your contract, help issue proper invoices, enforce prompt payment, and protect your lien rights under Ontario law.
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