A lesser known provision of the Alberta Builders' Lien
Act creates a trust fund in favour of
subcontractors.
Narrow Provisions
These statutory trust provisions are narrow in their operation.
They only apply when "a certificate of substantial performance
is issued" and they only apply to payments made by the
owner after the date the certificate is issued. But in certain
circumstances they can provide a financial safety net for
subcontractors.
The certificate of substantial performance is mainly used to
obtain progressive release of the holdback funds (a topic we have
discussed extensively in prior blog posts). Up to the date of
substantial performance, the holdback funds are held by the owner
to ensure that the subcontractors will be paid, and to satisfy the
owner's statutory obligations should a lien be filed. Section 22 of the Builders' Lien Act
provides that a payment made by the owner after a certificate of
substantial performance is issued is a trust fund
