You’ve set up your invoicing system, scheduled your team and suppliers, and wrapped up a project you’re proud of. Everything’s running smoothly, until payment day comes and goes, and the money still isn’t in your account. A week passes. Then a month. Suddenly, you’re carrying someone else’s debt. Non-payment is one of the toughest realities in the construction industry, but Ontario Construction Act payment protections can help you recover what you’re owed—if you know how to use them. Understanding these legal safeguards starts long before the first hammer hits the ground.
A week passes. Then a month. Suddenly, you’re carrying someone else’s debt.
Non-payment is one of the toughest realities in the construction industry, and protecting yourself starts long before the first hammer hits the ground.
We asked Jacklyn Tuckey, a leading construction lawyer at Barriston Law, to share three key elements of Ontario’s Construction Act that every builder, contractor, and developer needs to understand to avoid cash-flow crises and payment disputes.
1. The Prompt Payment Provisions
Under the prompt payment provisions of Ontario’s Construction Act, any contractor who contracts directly with the property owner must be paid within 28 days of delivering a proper invoice.
Your contracts and invoices should clearly reflect this timeline. If payment hasn’t been made within 28 days, and no Notice of Non-Payment has been received explaining the reason for the delay, it’s time to take action.
Pro tip: Mark that 28-day deadline in your calendar the moment you issue an invoice. A quick review on day 28 ensures you still have time to exercise your lien rights if needed.
If you’re a subcontractor or supplier, your payment timeline looks slightly different. The contractor who hired you must pay within 7 days of receiving payment from the owner, meaning no later than 35 days from the date the contractor invoiced the owner.
If the owner fails to pay the contractor, payment to you must still be made within 35 days of that invoice.
They must issue a Notice of Non-Payment detailing the reasons if an owner or contractor disputes payment. If you disagree with the reasons or can’t resolve them quickly, seek legal advice before those deadlines expire.
2. The Construction Lien
If your business supplied services or materials that form part of an improvement to a property, you may be entitled to a construction lien for the value of what remains unpaid.
However, strict timelines apply:
- A lien must be preserved (typically by registering a claim for lien on title) within 60 days of the earlier of:
- publication of a certificate or declaration of substantial performance,
- completion, abandonment, or termination of the contract, or
- the date of last supply.
Once preserved, you have another 90 days to perfect the lien, usually by starting a court action in the Superior Court of Justice and registering a certificate of action on title.
These deadlines are rigid and unforgiving. Missing them means losing the security of the lien, even if you still have a breach-of-contract claim.
Subcontractors who miss the lien deadlines may also lose the right to claim against the property owner altogether.
Each project’s timeline and contract type can shift the clock which makes it critical to consult a construction lawyer early if you anticipate non-payment.
3. The Holdback
Under the Construction Act, every payer, whether owner, contractor, or subcontractor, must hold back 10% of the price of services or materials supplied.
While it can be a source of frustration, the statutory holdback serves an important purpose:
- For owners, retaining the proper holdback protects them from paying twice if a contractor fails to pay subcontractors.
- If an owner doesn’t retain the required holdback, they risk being personally liable for unpaid amounts.
- For subcontractors, the holdback provides a measure of security, ensuring at least partial payment if they need to pursue legal recovery for the rest.
In short, the holdback protects everyone in the payment chain, as long as it’s properly calculated and retained.
If you’re unsure how to manage holdback amounts or track them across multiple projects, this is where good financial controls become as important as good legal advice.
Why Financial Clarity Is Your Best Legal Strategy
Construction law and financial management go hand in hand.
Even with strong contracts, builders often face tight margins, complex payment structures, and overlapping timelines.
Working with legal experts like Jacklyn Tuckey ensures your rights are protected from day one, and partnering with financial specialists like Finalyze CFO helps you plan, track, and manage every dollar with confidence.
At Finalyze CFO, we provide a full turnkey solution for construction and contractor firms. We work with developers and construction businesses before the first shovel hits the ground, building accurate capital forecasts, managing draws, and ensuring every invoice ties back to the contract. Our comprehensive approach includes monitoring project costs versus budget, tracking costs down to the cost code level, and ensuring change orders are properly approved and managed throughout the project lifecycle.
Because when your legal and financial strategies align, you prevent surprises and keep your projects moving profitably.
For more information about construction law and your rights and remedies, please contact Jacklyn Tuckey at Barriston Law – jtuckey@barristonlaw.com. For more information about financial planning, please contact the Finalyze CFO Team – info@finalyzeCFO.com.
About Jacklyn Tuckey
Jacklyn is a civil and commercial litigator with a focus on construction law at Barriston Law. She represents clients through negotiation, mediation, arbitration, and litigation, achieving practical and effective outcomes.
Jacklyn helps construction clients with:
- Construction lien claims and disputes
- Contract disputes and breach of contract matters
- Payment disputes and statutory holdback issues
A graduate of Osgoode Hall Law School (2019) and the University of Toronto (2016), Jacklyn also holds the Osgoode Certificate in Construction Law, National Edition (2022) and is currently completing her LL.M. in Construction Law. Born and raised in Barrie, Ontario, Jacklyn is active in the Rotary Club of Barrie and local legal associations. Outside of work, she enjoys reading, watching biopics of ’70s artists, traveling, and spending time with family and friends.
About Finalyze CFO
Finalyze CFO helps construction and real estate businesses build smarter and scale faster through clear financial strategy and hands-on advisory support. From project cash flow planning and draw management to fractional CFO services, our team helps owners stay profitable, compliant, and ready for growth at every stage of development.
Book a free strategy call to see how Finalyze can strengthen your project’s financial foundation.