What should i know about the Construction Remedies Act before starting a major renovation project in New Brunswick?

The Construction Remedies Act (SNB 2020, c.29) is New Brunswick's construction lien and prompt payment law that protects both contractors and homeowners — understanding it before your major renovation can prevent payment disputes and legal headaches.

This legislation replaced the old Mechanics' Lien Act in November 2021 after 45+ years, bringing New Brunswick in line with modern construction law. If contractors or suppliers aren't paid for work on your property, they can place a construction lien against your home, potentially preventing you from selling or refinancing until the debt is resolved.

Key protection for homeowners: The Act requires holdback provisions on construction contracts over certain thresholds. This means you're legally entitled to hold back a percentage of each payment (typically 10%) for a specified period after substantial completion. This holdback protects you if deficiencies emerge or if subcontractors claim they weren't paid by your general contractor.

Prompt payment rules work both ways — while contractors must pay their suppliers and subcontractors within specific timeframes, homeowners also have obligations to pay contractors promptly once work is completed satisfactorily. The Act establishes clear timelines and dispute resolution processes, reducing the likelihood of payment conflicts that can stall your project.

Lien deadlines matter significantly. Contractors and suppliers have strict time limits to file liens after completing their work or supplying materials. Understanding these timelines helps you know when lien risks have passed. However, don't assume you're in the clear just because time has passed — unpaid contractors can still pursue other legal remedies.

Documentation becomes crucial under the Act. Keep detailed records of all payments, change orders, and completion dates. Take photos of work progress and maintain written communication with your contractor. This documentation proves invaluable if disputes arise or if you need to demonstrate compliance with holdback requirements.

Trust accounts are another important feature. For larger projects, contractors may be required to maintain separate trust accounts for funds received from homeowners, ensuring money flows properly through the payment chain to subcontractors and suppliers.

Before signing any major renovation contract, verify that it complies with the Construction Remedies Act requirements. The contract should clearly outline payment schedules, holdback amounts, lien waiver procedures, and dispute resolution mechanisms. Many contractors now include specific clauses addressing the Act's requirements.

Professional guidance recommended: For renovations over $50,000, consider having a construction lawyer review your contract to ensure it properly incorporates Construction Remedies Act protections. The upfront legal cost is minimal compared to potential lien complications later.

Next step: Discuss lien procedures and holdback requirements with your contractor during the contract negotiation phase. A reputable contractor will be familiar with the Act and willing to structure payments accordingly. If they seem unfamiliar with these requirements, that's a red flag about their experience with larger projects.