Work out how much to keep back from a renovation progress invoice under a provincial lien act, and how much to pay now after deposits.
Several provincial lien acts require an owner to keep back part of each payment until the period for registering liens has passed. In Ontario (Construction Act, s. 22) and British Columbia (Builders Lien Act) the basic holdback is 10%, and Alberta's Prompt Payment and Construction Lien Act also uses 10%. Quebec has no statutory holdback but has legal hypothecs; see deposits, holdbacks and payment schedules.
Formula: kept back = invoice × holdback % + deficiency amount; pay now = invoice − kept back − deposit credited.
Worked example (illustrative, the default): a $30,000 progress invoice with a 10% holdback and a $3,000 deposit credited: kept back = $30,000 × 10% = $3,000; pay now = $30,000 − $3,000 − $3,000 = $24,000. The $3,000 holdback is paid once the lien period has expired and a title search shows no lien.
Limits: lien periods, the base for the holdback and the rules for releasing it differ by province and are strict. This is arithmetic, not legal advice; ask a lawyer (or a notary in Quebec) if a lien is registered or threatened.
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How big a renovation deposit should be, how to tie payments to stages, the 10% holdback under Ontario, BC and Alberta lien acts, Quebec legal hypothecs, and worked payment examples.
