Prompt Payment vs. Prepaid Contracting In Alberta Residential Renovations: A Practical Guide For Contractors

Residential renovation contractors in Alberta operate under two separate legal regimes that both affect how – and when – they get paid:

• the Prompt Payment and Construction Lien Act (“PPCLA”);¹ and
• Alberta’s prepaid contracting rules under consumer protection legislation.²

These regimes are often confused, particularly when it comes to deposits, progress payments, invoicing, holdbacks, and payment timelines. That confusion can be costly. Missteps may result in lost lien rights, penalties, or avoidable payment disputes with homeowners.

This article explains how prepaid contracting interacts with the PPCLA, and how contractors can structure projects to stay compliant with both.

The key distinction to keep in mind