How Changes To Ontario's Construction Act May Impact Your Next Commercial Lease

Significant amendments to the Ontario Construction Act (formerly the Construction Lien Act) have come into force in 2018 and 2019. These changes have important ramifications for commercial leasing. Notably, landlords will need to manage their exposure to liens in a more proactive way, and tenants may find themselves waiting for improvement allowances that are held back due to longer lien periods.

What has changed?

Elimination of the Opt-out Regime

Under section 19 of the previous Construction Lien Act, a landlord's potential liability for liens could be restricted. The contractor was required to give the landlord written notice of any construction project prior to commencing work, following which the landlord could disavow itself of any responsibility for the construction.