NCS Blog

Wrap-Up for the Week of September 15th

These are a few of the articles that caught our eye this week!
 

An article via Lexology: “Holdback Can Be Released Early? Understanding Early Holdback Release Under Ontario’s Construction Lien Act

Here’s why we shared the article:
Holdback is to Canada as retainage is to the United States. Retainage is the agreed amount of a contract price retained from a contractor as assurance that subcontractors will be paid and the job will be completed.
 
Under Ontario’s Construction Lien Act, the required amount of holdback is 10%. In this article, the author tells us that typically a subcontractor will not be paid the remaining 10% of its contract until the issuance of a Certificate of Completion.  Unfortunately, with some of the current infrastructure projects, completion could be years away, subsequently subcontractors could go years without the remaining 10% of what they are owed.  The author discusses the perks and pitfalls to early holdback release.
 

A blog from McLennan Ross LLP: “Liening the Landlord for Tenant Improvements

Here’s why we shared the blog:
Ah, a good ol’ case of “who is responsible for this property improvement?” When liening a tenant improvement, the statutes vary by state as to whether a mechanic's lien would be available against the property, the leasehold interest of the tenant, or both. In this blog post, the author explains how to “test” for whether a landlord is the owner and if the owner is then responsible for the improvement to the property, in accordance with Alberta’s Builders’ Lien Act.
 

"The contractor or supplier working for a tenant should consider its lien rights against the landlord as a routine matter of due diligence. There are lots of situations where the right to lien a lease (the tenant’s interest) provides inadequate security for payment..."

 

An article via JDSupra: “Summary of California’s Prompt Payment Laws

Here’s why we shared the article:
Prompt Payment Laws vary state to state, and this article does a great job of thoroughly explaining California’s prompt payment statutes for owner to general contractor and general contractor to subcontractor for both private & public projects.
 

“The California legislature has enacted a comprehensive series of prompt payment statutes that are designed to ensure the prompt payment of progress payments and retention payments to downstream contractors by imposing harsh monetary penalties for any violations of the statutory scheme…As a general rule, owners and direct contractors should ensure that progress payments and retention are timely paid, or provide a clear and timely written notice to the direct contractor (or the subcontractor) that a good faith dispute exists as to the payment.”

 

NCS Blog: "So, When Was Your First Furnishing?"

And to round out the week, we posted a new blog “So, When Was Your First Furnishing?” to highlight the importance of knowing when you first supplied materials or labor to a project:

"Most statutes require a notice be served within so many days from first furnishing, which is typically the date the materials or services arrive on the job site. Although some companies may generate an invoice the same day as providing labor or materials, using an invoice date as a furnishing date could put your mechanics lien or bond claim rights in jeopardy."