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ARTICLE · 14 NOVEMBER 2019

Holdback – What You Need To Know

Miller Thomson
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Under the Construction Act, R.S.O. 1990, c. C.30 ("Act"), holdback obligations are created pursuant to Section 22 that provides that the owner is required to hold back 10% of the contract price.

CanadaReal Estate and Construction
Miller Thomson LLP
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Under the Construction Act, R.S.O. 1990, c. C.30 ("Act"), holdback obligations are created pursuant to Section 22 that provides that the owner is required to hold back 10% of the contract price from the contractor as well as the amount of any registered liens for which the owner has received notice of.  This requirement to hold back also applies to contractors since the Act requires contractors to retain holdback on behalf of subcontractors.  If the owner fails to retain holdback, the owner can be personally liable for the holdback obligations pursuant to Section 23 of the Act with respect to any lien action.

The obligations for the owners and contractors to retain holdback will terminate when subcontractors or suppliers that have done work or supplied materials for the improvement of a property can no longer make a lien claim as against the subject property as well as when any existing registered lien has been either resolved/paid or discharged with respect to the

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