BC's Construction Prompt Payment Act: What Contractors and Owners Need to Know

Slow payment down the contract chain is a familiar problem in construction. The Construction Prompt Payment Act is the Province's answer: fixed payment deadlines that run from the owner to the bottom of the subcontract chain, and a quick interim adjudication process for payment disputes.

The Act has passed but is not yet in force. It comes into force by regulation, and the regulations are still being developed. Owners, contractors and subcontractors can use the time to understand the rules and prepare their contracts.

Where the Act stands

The Construction Prompt Payment Act received Royal Assent on November 27, 2025, but none of it is in force yet, including its amendments to the Builders Lien Act. The whole Act comes into force by regulation of the Lieutenant Governor in Council (s 59), and no date has been set. The Province consulted on implementation until July 7, 2026, and has said it still needs to develop regulations and select an adjudication authority before the Act starts.

Two points will matter on commencement day:

• Existing contracts are not caught. The Act does not apply to a contract entered into before the transition section comes into force, or to subcontracts under that contract (s 50).
• It may be phased in. Regulations can exclude prescribed improvements, contracts, services or materials (s 4(2)) and can apply the Act gradually to different sectors or to public and private projects (s 51).

Until then, payment disputes are governed by your contract, the general law and the Builders Lien Act.

Proper invoices

The Act is built around the proper invoice. A contractor must give the owner a proper invoice monthly, unless the contract sets a different period or a milestone basis (s 5). The invoice must include set information, such as the contractor's name and address, the period it covers, the contract or purchase order it relates to, a description of the work and the amount payable (s 7(1)).

An invoice given as a proper invoice is deemed to be one unless the owner, within 7 days after the invoice date, gives written notice saying what is missing (s 7(2)). A contract term that makes giving a proper invoice conditional on a payment certifier's certification or the owner's approval is void (s 6), although certification after the invoice is given and testing or commissioning are still allowed.

The payment deadlines

• Owner to contractor. The owner must pay within 28 days after the invoice date (s 9(1)(a)).
• Down the chain. Each contractor or subcontractor must pay its own subcontractors by the earlier of 7 days after it is paid, or its calculated payment date (s 9(1)(b)).
• Calculated payment date. 28 days plus 7 days for each step down the chain (s 9(2)). For example, a general contractor's date is 35 days after the invoice date, and a first-tier subcontractor's date is 42 days.
• Interest. Late amounts carry interest at the higher of a prescribed rate and the contract rate (s 15).

Builders Lien Act holdbacks still apply. The duty to pay is subject to the required holdback (s 13), which is currently 10% under section 4 of the Builders Lien Act.

Notices of non-payment

A party that disputes an amount can withhold it by giving a written notice of non-payment stating the amount and reasons (s 11). An owner must give it within 14 days after the invoice date. A contractor or subcontractor must give it by the earlier of 7 days after receiving a notice from above, or its calculated payment date. If the reason is non-payment further up the chain, the notice must include a copy of the upstream notice and an undertaking to refer that dispute to adjudication within 21 days.

Interim adjudication

The Act creates a fast, interim process for disputes about invoices, payments, notices of non-payment, valuation of work and change orders, among others (s 16). Key features:

• An adjudication cannot be started if notice is given more than 90 days after the head contract is completed, abandoned or terminated; for subcontracts, the 90 days can start earlier, for example when the subcontractor last supplies work (s 19).
• The parties choose a registered adjudicator, or the adjudication authority appoints one. A contract clause naming the adjudicator in advance is void (s 23(5)).
• The adjudicator must issue a written determination within 30 days after receiving the referring party's records, with limited extensions (ss 25 and 30).
• The determination binds the parties until a court or arbitrator finally decides the dispute or they agree otherwise (s 31). An amount ordered must be paid within 15 days (s 34), and if it is not, the party owed can suspend work (s 35) or file the determination in the Supreme Court to enforce it as a judgment (s 36).
• Judicial review must be sought within 35 days, on narrow grounds (ss 39 and 40).

Parties cannot contract out of the Act. A term saying the Act does not apply, or that its remedies are unavailable, is void (s 47(2)).

Changes to the Builders Lien Act

The same Act amends the Builders Lien Act, also on a date set by regulation. When in force, the holdback period will shorten from 55 days to 46 days (s 56), liens against the holdback itself, often called Shimco liens, will be abolished (s 54), and "improvement" will expressly include demolition and removal (s 52). The holdback period that purchasers of strata lots from an owner developer retain under section 88 of the Strata Property Act will also move to 46 days (s 58).

Preparing now

Because the Act will apply only to contracts made after it starts, the practical work is in your templates and processes:

• review standard contracts and subcontracts for invoicing periods, certification steps and payment terms that may not fit the new deadlines;
• set up invoicing that meets the proper invoice requirements, and calendar the 7-day and 14-day response windows;
• make sure someone is responsible for issuing notices of non-payment on time;
• watch for the regulations, which will set the start date, any excluded projects, the interest rate and any prescribed forms.

Owed money on a project, or reviewing your contracts? Get advice early

Our litigation lawyers can advise on payment disputes and builders lien claims under the current rules, explain how the new Act may affect your projects, and work with our business law team to update your construction contracts.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.