Question 1

What is a holdback under Alberta's Prompt Payment and Construction Lien Act?

Accepted Answer

In these answers, the holdback is the amount an owner must retain under section 18(1) of the Prompt Payment and Construction Lien Act. The section says an owner who is liable on a contract under which a lien may arise must, when making payment on the contract, retain 10% of the value of the work actually done and materials actually furnished.

The section's word is "retain". A Service Alberta fact sheet dated 12 December 2025 refers to "statutory holdbacks" under the Act. The section is the general rule, and other provisions of the Act change it in some cases.

Question 2

How much must an owner hold back, and for how long?

Accepted Answer

Section 18(1) of the Prompt Payment and Construction Lien Act says an owner liable on a contract under which a lien may arise must, when making payment, retain 10% of the value of the work actually done and materials actually furnished for 60 days. The 60 days run from the date a certificate of substantial performance is issued or, where none is issued, from the date the contract is completed.

This is the general rule; other provisions of the Act change the period or the amount in some cases. Alberta.ca's page of 15 December 2025 says projects with a minimum $10 million contract value that exceed 12 months in duration will be able to use new rules that allow quicker release of holdbacks.

Question 3

What happens to the holdback when the contract is finished?

Accepted Answer

Section 18(1) of the Prompt Payment and Construction Lien Act requires an owner liable on a contract under which a lien may arise to retain the holdback for 60 days. The 60 days run from the date a certificate of substantial performance is issued or, if none is issued, from completion of the contract.

Separately, section 27(1) says that, 60 days after the contract is completed, payment of the major lien fund may be validly made so as to discharge the owner's liability in respect of all liens that are a charge on that fund. This is so unless a statement of lien is registered. The sources read for this page do not say to whom the payment is made or how the major lien fund relates to the holdback. Section 27 has further subsections on these dates.

Question 4

Is there a limit on what an owner can be liable for under the lien rules?

Accepted Answer

Yes. Section 25 of the Prompt Payment and Construction Lien Act says an owner is not liable under the Act for more than the total of the major lien fund and the minor lien fund. Where a minor lien fund does not arise under section 23, the limit is the major lien fund alone.

The limit is on liability under the Act. Section 69 says the court may order the owner and contractor, or either, to pay all the costs of lien proceedings if it appears to the court that they arose from an owner's or contractor's failure to fulfil its contract or comply with the Act. The sources read for this page do not say whether the limit also covers what an owner owes under its contract or those costs, or how either fund is worked out.

Question 5

What is a proper invoice under Alberta's prompt payment rules?

Accepted Answer

Under section 32.1(1) of the Prompt Payment and Construction Lien Act, a proper invoice is a written bill or other request for payment for work done or materials furnished in respect of an improvement under a contract, if it contains the information the subsection lists. That information includes a statement that the invoice is intended to constitute a proper invoice.

The invoice must also meet any other requirements specified in the contract, subject to subsection (4). Section 32.1(6) says that, subject to the regulations, proper invoices must be given to an owner at least every 31 days, unless the contract has a testing and commissioning provision whose conditions are not met. The 28-day payment period in section 32.2(1) runs from receiving a proper invoice.

Question 6

Can our contract require approval before the contractor may give an invoice?

Accepted Answer

Generally not, as a condition of giving the invoice. Section 32.1(3) of the Prompt Payment and Construction Lien Act says that, subject to subsection (4), a contract provision making the giving of a proper invoice conditional on a person's prior certification, or the owner's prior approval, is of no force or effect.

The section is about the giving of the invoice. The sources read for this page do not say that it requires an owner to pay a disputed invoice; under section 32.2(2), an owner may give a notice of dispute no later than 14 days after receiving the invoice. Subsection (4) qualifies the rule, and whether the section applies to a given contract is a question for the corporation's lawyer.

Question 7

How quickly must an owner pay a proper invoice in Alberta?

Accepted Answer

An owner who owes money under a proper invoice must pay the amount payable no later than 28 days after receiving the proper invoice, says section 32.2(1) of the Prompt Payment and Construction Lien Act. That is subject to subsection (2), under which an owner who disputes the invoice may refuse to pay all or part if it gives the contractor a notice of dispute no later than 14 days after receiving it.

Separately, section 18(1) requires an owner liable on a contract under which a lien may arise to retain holdback when making payment. Section 4 of the Prompt Payment and Adjudication Regulation sets the rate of interest, for section 32.6 of the Act, on amounts in a proper invoice that are unpaid and due. The rate is the one specified in the contract or, if none is specified, the current rate in the Judgment Interest Regulation.

Question 8

Can an owner dispute a contractor's invoice, and what is a notice of dispute?

Accepted Answer

Yes. Section 32.2(2) of the Prompt Payment and Construction Lien Act lets an owner who disputes a proper invoice refuse to pay all or any portion of the amount payable within the 28-day payment period. It applies if, no later than 14 days after receiving the invoice, the owner gives the contractor a notice of dispute specifying the amount not being paid and detailing all the reasons for non-payment.

The notice must be in the prescribed form and manner. Section 1.1 of the Prompt Payment and Construction Lien Forms Regulation says a notice of dispute under section 32.2(2) is to be in Form 1. The sources read for this page do not say what happens after a notice is given.

Question 9

What is a construction lien in Alberta, who has one, and is there a minimum amount to register it?

Accepted Answer

Under section 6(1) of the Prompt Payment and Construction Lien Act, a person who does or causes to be done work on or in respect of an improvement, or furnishes material for one, for an owner, contractor or subcontractor has a lien. The lien is on the owner's estate or interest in the land being improved, for so much of the price as remains due to the person, subject to subsection (2).

Section 35(3) of the Act says no lien shall be registered unless the claim or joined claims amount to or aggregate $700 or more. For history, section 19 of the Builders' Lien (Prompt Payment) Amendment Act, 2020 struck out "$300" and substituted "$700" in section 35(3) of the Builders' Lien Act.

Question 10

How long does a contractor have to register a lien, and how long does it last?

Accepted Answer

Section 41(4) of the Prompt Payment and Construction Lien Act generally lets a contractor or subcontractor register a lien until 60 days after the contract or subcontract is completed or abandoned. Under section 43(1), a registered lien ceases to exist unless, within 180 days of registration, an action is commenced under the Act to realize on it (or in which it may be realized) and the claimant registers a certificate of lis pendens.

Under section 42, a lien not registered in time ceases to exist. Section 41(4) applies where subsections (1) to (3) do not, and the 60-day period is subject to clauses (b) and (c), which the corporation's lawyer should check. For history, the Builders' Lien (Prompt Payment) Amendment Act, 2020 replaced "45 days" with "60 days" in section 41(4)(a) of the Builders' Lien Act.

Question 11

What can an owner do once a lien has been registered against its land?

Accepted Answer

Once a statement of lien is registered, the Prompt Payment and Construction Lien Act allows an owner to give security or pay money into court. Section 45(1) also lets an owner or another person affected by a lien serve written notice on the registered lienholder to commence an action to realize on the lien.

Section 27(3) lets the owner apply to give security for or pay into court the amount of the major lien fund, the minor lien fund or both (the Act's terms). Under section 45(1), the lien ceases to exist if the lienholder does not commence the action and register a certificate of lis pendens within 30 days of being served. Clause (b) gives an alternative for a lienholder that is a party to another registered lienholder's action, and the Act has further provisions on these steps.

Question 12

Can a lienholder or subcontractor demand to see an owner's contract and accounts?

Accepted Answer

Yes. Section 33(2) of the Prompt Payment and Construction Lien Act lets certain people demand, in writing and at any reasonable time, to inspect the contract and the statement of the state of accounts referred to in subsection (3). They are a lienholder, a beneficiary of a trust, and a contractor or subcontractor currently working under a contract.

If the owner or its agent does not produce them when the demand is made or within 6 days after it, section 33(4) makes the owner liable in an action for any loss the person sustains because of the refusal, neglect or false statement. For a contractor or subcontractor, the demand must be for information about a particular project under the contract. Unit owners are not on that list; this answer does not cover their other rights to documents.

Question 13

Does the Act say a condominium corporation is the "owner" for holdback?

Accepted Answer

The sources reviewed for this page do not say whether a condominium corporation is the "owner" for the holdback rules under Alberta's Prompt Payment and Construction Lien Act. Section 1(j) of the Act defines an owner as a person having an estate or interest in land at whose request, among other tests, work is done or material is furnished for an improvement to the land.

In those sources, the definition does not name condominium corporations. Section 78(1)(b) and (2) of the Condominium Property Act speak of where a lien attaches and is registered and enforced when a corporation requests certain work or material, but in those sources they do not say who is the owner for holdback. That is a question for the corporation's lawyer.

Question 14

What does the Condominium Property Act say about liens when the corporation requests the work?

Accepted Answer

Section 78(1)(b) of the Condominium Property Act covers work or material that a corporation requests in the terms the paragraph sets out, including the words "intended for the benefit of the common property generally". Any lien arising under the Prompt Payment and Construction Lien Act in consequence is on the estates of all the owners in all the units and the common property.

It describes work done in or on or in respect of the common property or a unit, or both, and material furnished for use in or on them. For such a lien, section 78(2) says a statement of lien registered against the condominium plan is deemed also registered against each unit's certificate of title and may be enforced against the common property and each unit. The sources read for this page do not say owners are personally liable. Section 78(1) has other paragraphs for other cases.

Question 15

If a lien is registered against the plan, who is notified, and can one owner clear only their unit?

Accepted Answer

When a statement of lien is registered against a condominium plan, the Registrar must notify the corporation but need not notify unit owners, says section 78 of the Condominium Property Regulation. Under section 78(3) of the Condominium Property Act, once the lienholder is paid enough to discharge the proportion of the liability relating to an owner's unit and share, it shall, on demand, give that owner a discharge for the unit and share.

The Regulation's notice rule is for the purposes of section 78(2) of the Act, and section 78(3) applies to a lien referred to in section 78(1)(b). The sources read for this page contain no rule requiring the corporation to pass the notice on to owners, so check the bylaws and the Act. They do not say who makes the payment under section 78(3) or how the proportion relating to a unit is calculated.

Question 16

What is adjudication under Alberta's prompt payment rules, and when is it available?

Accepted Answer

Under section 33.4(1) of the Prompt Payment and Construction Lien Act, a party to a contract or subcontract may refer to adjudication a dispute with the other party respecting any prescribed matter. An adjudicator then makes a determination of the matter. The referral is made in accordance with that section and the regulations or the procedures established by the responsible Nominating Authority.

Section 19 of the Prompt Payment and Adjudication Regulation lists matters a party may refer to adjudication. They include the valuation of services or materials provided under the contract or subcontract, including for a written change order, whether approved or not, or a proposed change order. The Act's section 33.4 has further conditions, including a time limit, that the corporation's lawyer should check.

Question 17

Is an adjudicator's decision under Alberta's prompt payment rules binding, and what role does a Nominating Authority have?

Accepted Answer

An adjudicator's determination is binding on the parties to the adjudication, says section 33.6(5) of the Prompt Payment and Construction Lien Act. The section lists three exceptions: where the court directs otherwise, where an arbitrator appointed by the parties under the Arbitration Act has made an award on the matter, or where the parties have entered into a written agreement that resolves it.

Section 21(1) of the Prompt Payment and Adjudication Regulation says that, subject to subsection (2), the parties to a contract may designate in it a Nominating Authority to which a notice of adjudication must be submitted if a party refers a dispute to adjudication. Alberta.ca's page of 15 December 2025 said ARCANA (AB) and ADACC were the two Nominating Authorities then operating in Alberta. The Act and the Regulation have further rules on the third exception, judicial review and court actions.

Question 18

Can an owner and a contractor agree that the holdback and lien rules do not apply?

Accepted Answer

Generally not. Section 5(1) of the Prompt Payment and Construction Lien Act makes void, subject to subsections (2), (3) and (4), an agreement by any person that the Act does not apply or that its remedies are not available for the person's benefit.

Service Alberta's fact sheet dated 12 December 2025 says that when a contract or subcontract contains an opt-out waiver from a consulting professional, the owner is no longer required to maintain statutory holdbacks. Section 35.1(2) of the Prompt Payment and Adjudication Regulation applies where a contract includes a provision stating that a member of a prescribed class of professionals waives the member's right to enforce a lien. In that case it deems the owner's obligation to retain under sections 18 and 23 of the Act waived. The sources read for this page do not say how a waiver in one contract affects holdback under another.

Payment, holdback and liens: what condo boards ask about Alberta's prompt payment rules

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