Better Late than Never: N.S. Government Enacts Early Release of Holdback Regulations

On April 24, 2017, the N.S. Government issued regulations that will finally allow the Builders’ Lien Act amendments permitting early release of holdback to subcontractors to take effect June 30, 2017 – allowing project funds to flow earlier, and avoiding liens and claims for unpaid holdback.

As per our May 8, 2013 Legal Alert, amendments to the Builders’ Lien Act to allow owners to release subcontractor’s holdbacks early were introduced and passed in 2013 and subsequently amended in 2014. However, neither amendment could be proclaimed in force because early holdback release required (among other things) posting notice that the subcontractor’s work had reached a stage allowing for release of holdback. The government was supposed to issue regulations respecting how, when and where notice was to be posted in conjunction with the original amendments, but did not. Now that the government has finally issued these regulations, the Builders’ Lien Act amendments allowing early holdback release will come into force on June 30, 2017. Under the new regulations:

Exception. Early release of holdback will not apply to single family residences owned or occupied by the owner or their spouse if the value of the work involved is $75,000 or less.

Notice of Substantial Performance. No later than 10 days after a general contractor achieves substantial performance of its contract, the owner must post a notice of substantial performance on the publicly available portion of the Construction Association of Nova Scotia website and if there is a job site office, in a prominent location at the job site office.

Notice of Subcontract Completion. No later than 10 days after a subcontract is certified complete by the project consultant or, if none, by the owner and general contractor (acting jointly), the owner must post a notice of subcontract completion on the publicly available portion of the Construction Association of Nova Scotia website and if there is a job site office, in a prominent location at the job site office.

Notice Requirements. A notice of contract or subcontract completion must include all of the following information:

• the owner’s name and address;
• the general contractor’s name and address;
• in the case of a subcontract, the names and addresses of both the subcontractor and of the person on whose certificate payments are to be made;
• a description of the work or services performed;
• a description of the land on which the work was performed; and
• the date on which the contract was substantially performed or the subcontract was certified complete.

No Notice Fee. The Construction Association of Nova Scotia cannot charge any fee for the posting of these notices on its website or for anyone to search or view the posted notices.

Please contact your McInnes Cooper lawyer or any member of the Construction Law Team @ McInnes Cooper to discuss this topic or any other legal issue.

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