Architects, Engineers, and Holdbacks
Architects and engineers will receive the benefit of the prompt payment provisions of Alberta’s new Prompt Payment and Construction Lien Act. They will be subject to construction lien holdbacks as well.
It was always debatable if engineers and architects should be subject to holdbacks under the Alberta Builders’ Lien Act. They always had (and still have) lien rights, at least in respect of certain work (i.e. work “in respect of an improvement”). The corollary is that they always should have been subject to lien holdbacks in respect of the same work. However, in many sectors, it was a practice or convention to exempt consultants from holdbacks, even when they were not legally exempt.
Once the amendments take effect, architects and engineers will be subject to the Act, including all lien (and lien holdback) provisions. Section 35 of the Prompt Payment and Adjudication Regulation simply provides: …”the Act applies to the following persons contracted to act in a consultative capacity in respect of an improvement: (a) a regulated professional engineer; (b) a regulated professional architect.” The sole purpose of this provision appears to be to remove any debate that architects and engineers are governed by the Act – all of it.
There is still a bit of room for debate as to exactly what work performed by consultants is lienable and subject to holdbacks; i.e. the legislation does not necessarily apply to all work consultants do; it applies to work “in respect of an improvement.” For example, there is case law that says consulting work respecting subdivision and development (as opposed to construction) is not work “in respect of an improvement.” The amendments don’t change that distinction.
The amendments (and associated Regulations) take effect when the Builders' Lien (Prompt Payment) Amendment Act comes into force on August 29, 2022.