When your strata pays a contractor for work on common property, the Builders Lien Act says 10% of each payment stays with the strata until 55 days after the job is done. Skip it, and an unpaid subcontractor can register a lien against owners’ titles, and the strata can end up paying up to that 10% a second time. A second law is coming. BC’s Construction Prompt Payment Act passed in November 2025 and, as written, will put 28-day payment deadlines on a strata that hires a contractor.
This guide covers the holdback rules councils deal with now, the holdback account for jobs of $100,000 or more, when the money can be released and what the new law will change. Read it before council signs a contract for a roof, an envelope repair or a parkade membrane.
Key takeaways
- The holdback: 10% of the greater of the value of work done and the payments made, on every contract under which a lien may arise (Builders Lien Act s.4).
- The clock: the holdback period ends 55 days after a certificate of completion, or after the work is completed, abandoned or terminated (s.8). Claims of lien must be filed within 45 days (s.20).
- The account: for work worth $100,000 or more, the holdback goes into a separate holdback account at a savings institution, run with the contractor (s.5).
- Why it matters: claimants under one contractor can recover up to the greater of what the strata still owes that contractor and the holdback it should have kept (s.34).
- What’s coming: 28 days to pay a proper invoice, 14 days to dispute it and a 46-day holdback period, once the Construction Prompt Payment Act is in force.
What a builders lien holdback is
What is a builders lien holdback in BC?
A builders lien is a claim against land for unpaid work or materials. Under section 2 of the Builders Lien Act, an unpaid contractor, subcontractor or worker has a lien on the improvement, the owner’s interest in it and the land. A holdback is the share of each payment that whoever pays a contractor keeps back, so money is there if someone further down the chain goes unpaid.
Section 4 sets the amount at 10% of the greater of the value of work and materials actually provided and the payments made. It applies whether the contract pays monthly or in one lump sum. You don’t hold back from a worker’s wages, a material supplier, an architect or an engineer (s.4(6)).
The Strata Property Act applies the Builders Lien Act to land in a strata plan (s.86). For common property work, the strata corporation signs the contract and pays, so it holds back. A CHOA bulletin on holdbacks for strata corporations, written by strata lawyer Elaine McCormack in 2015, takes the same view, including on the holdback account below. The sections it relies on haven’t changed since.
Why the holdback protects owners
A lien for common property work doesn’t stay with the strata corporation. CHOA’s bulletin notes that a contractor can register it against the title of every strata lot, even when the work was on one balcony, with the full amount on each title. A lien on title can hold up an owner’s mortgage renewal, refinancing or sale. Under section 90 of the Strata Property Act, an owner can ask the court to clear their title by paying their lot’s share into court.
On a common property job, every lot in the plan is exposed. Across BC, the Land Title and Survey Authority counted 807,738 active strata lots in 35,098 strata plans on March 31, 2026.
The holdback is what limits it. Section 34 caps what all lien claimants under one contractor can recover. The cap is the greater of what the strata still owes that contractor and the holdback it was required to keep.
A worked example. Council signs a $400,000 contract to re-roof. The required holdback is $40,000. The strata pays every invoice in full, and the roofer fails to pay its sheet-metal subcontractor $30,000. The subcontractor files a claim of lien within 45 days of completion. The strata owes the roofer nothing, but the cap is the larger amount, the $40,000 it should have kept, so the $30,000 claim stands against the land. The strata pays twice. Had it kept the $40,000, it would have had the money to clear the lien.
A strata that pays in full without a holdback can end up paying up to 10% of the contract twice.
The holdback account for jobs of $100,000 or more
For a contract where the work and materials are worth $100,000 or more, section 5 requires the owner to:
- open a holdback account at a savings institution for that contract;
- pay the required holdback into it;
- administer the account together with the contractor.
Money in the account is held in trust and can’t be paid out without the agreement of everyone who administers it. Interest goes to the owner during the holdback period and to the contractor after it, unless they agree otherwise (s.5(6)). If the owner doesn’t pay the holdback into the account, the contractor can suspend work on 10 days’ notice (s.5(7)).
CHOA’s bulletin says a strata needs an account for each contract that meets the threshold, so a strata that hires its own trades on a big project may run several. Put the account and who signs on it into the contract, and have the strata’s lawyer check the setup before the first payment.
When the holdback is released
When can a strata release the holdback?
When the holdback period ends with no claim of lien filed. Under section 8, the period ends 55 days after a certificate of completion is issued for the contract or, without one, 55 days after the head contract is completed, abandoned or terminated.
“Completed” has a set meaning. A contract is substantially performed when the work left is small (s.1(2)). Finishing or correcting it must cost no more than 3% of the first $500,000 of the price, 2% of the next $500,000 and 1% of the rest. On the $400,000 roof, that’s $12,000 of work.
The payment certifier issues the certificate of completion. It’s the architect, engineer or other person the contract names. If the contract names nobody, the strata itself certifies amounts due to the contractor (s.7(1)). When a contractor asks, the certifier has 10 days to decide whether the work is complete. Once it issues a certificate, it has 7 days to send copies and post a notice on site (s.7(3) and (4)). A certifier who doesn’t is liable for resulting losses, so on a large project, name your consultant.
| Day | What happens |
|---|---|
| 0 | Certificate of completion issued, or the work is completed, abandoned or terminated |
| By day 7 | The certifier sends copies and posts a notice of certification on site (s.7(4)) |
| Day 45 | Last day to file a claim of lien (s.20) |
| Day 55 | Holdback period ends (s.8) |
| After day 55 | Release the holdback if no lien was filed (s.8(4)) |
Before releasing the money, have your manager or lawyer search the titles for claims of lien. A lien not filed in time is extinguished (s.22).
What the Construction Prompt Payment Act will change
BC’s Construction Prompt Payment Act passed third reading on November 20, 2025 as Bill 20 and received Royal Assent on November 27. As of the Province’s August 20, 2026 update, it isn’t in force: regulations and an adjudication authority are still to come. In a spring 2026 discussion paper, the Province proposed applying it to all public and private projects at once, and it took submissions until July 7, 2026.
The Act defines an owner as a person who retains a contractor for an improvement (s.1). As passed, that includes a strata corporation hiring a roofer, unless a regulation exempts the work. It applies only to contracts made after it comes into force (s.50), so contracts council signs before then stay under today’s rules.
| Today | Once the Act is in force | |
|---|---|---|
| Invoices | Whatever the contract says | A proper invoice monthly, unless the contract sets milestones or another basis (s.5) |
| Checking an invoice | No legal deadline | Deemed proper unless the strata objects in writing within 7 days (s.7) |
| Paying | Whatever the contract says | Within 28 days of the invoice date (s.9) |
| Disputing an amount | Under the contract, or in court | A written notice of non-payment within 14 days, with the amount and reasons (s.11) |
| Late payment | Contract interest, if any | Interest at the higher of a prescribed rate and the contract rate (s.15) |
| Disputes | Court or arbitration | Interim adjudication; a decision within 30 days of receiving the records (s.30) |
| Holdback period | 55 days | 46 days (Bill 20, s.56) |
The holdback stays. A payment due under the Act is still subject to the required holdback (s.13). A contract also can’t make a proper invoice depend on council’s approval or a consultant’s certificate (s.6), though approval after the invoice arrives is allowed. On interest, the discussion paper floated using the BC Supreme Court’s pre-judgment interest table, which listed 2.45% on January 1, 2026.
What it means for council. A council that meets monthly can’t review every invoice inside a 7-day window or dispute one inside 14 days. Before you sign a contract under the new rules, name the consultant or manager who reviews each invoice. Set out in a council resolution who can approve payment and who can issue a notice of non-payment, and within what limits. Then line up the money: if a special levy funds the job, set the instalment dates before the large invoices fall due.
Before you sign: a holdback checklist
Print this for the meeting where council approves the contract.
| Check | Where it comes from |
|---|---|
| The contract states a 10% holdback on every payment | Builders Lien Act s.4 |
| For work of $100,000 or more, a holdback account is open before the first payment | s.5 |
| The contract names the payment certifier | s.7 |
| Council knows the substantial-performance threshold for this contract | s.1(2) |
| Titles are searched for liens before the holdback is released | ss.8, 20 and 22 |
| The contract date is recorded, so you know which payment rules apply | Construction Prompt Payment Act s.50 |
| Someone can review an invoice within 7 days and dispute it within 14 | CPPA ss.7 and 11, once in force |
| Special levy instalments fall before the big invoices | Strata Property Act s.108 |
To find companies for the work, start with companies that work on BC strata buildings, nearest first, and send each the same request from the RFP builder for building work.
Related reading for your council
- Strata council duties in BC: who can sign contracts and spend the strata’s money.
- Special levy calculator: each lot’s share of a levy and the vote it needs.
- SGM procedural checklist: notice and votes for a levy meeting.
- Depreciation reports in BC: the plan that tells you which big projects are coming.
Sources
Checked on October 23, 2026. This is general information, not legal advice.
- Builders Lien Act (ss.1, 2, 4 to 8, 20, 22, 34), current to October 13, 2026
- Strata Property Act, Part 5 (ss.86 and 90)
- Bill 20, Construction Prompt Payment Act, third reading (November 20, 2025)
- Province of BC, Prompt payment legislation (updated August 20, 2026)
- Province of BC, Construction Prompt Payment Act discussion paper (spring 2026)
- CHOA bulletin 200-133, Builders lien holdbacks for strata corporations (2015)
- Land Title and Survey Authority, Strata property information (counts as at March 31, 2026)
Frequently asked questions
Does a strata corporation have to hold back 10% from a contractor?
Yes, on any contract under which a lien may arise. Section 4 of the Builders Lien Act requires the person primarily liable on the contract to retain 10% of the greater of the value of the work and materials provided and the payments made. For common property work, that's the strata corporation. No holdback is kept from a worker's wages, a material supplier, an architect or an engineer.
How long does a strata hold the builders lien holdback in BC?
Until the holdback period ends: 55 days after a certificate of completion is issued, or, without one, 55 days after the head contract is completed, abandoned or terminated (Builders Lien Act s.8). Claims of lien must be filed within 45 days (s.20). Once the Construction Prompt Payment Act comes into force, the holdback period drops to 46 days.
When does a strata need a holdback account?
When the work and materials under a contract are worth $100,000 or more. Section 5 of the Builders Lien Act requires the owner to open a holdback account at a savings institution for that contract, deposit the holdback and administer the account together with the contractor. Below $100,000, the holdback still has to be kept, but a separate account isn't required.
What happens if a strata pays a contractor in full without a holdback?
Unpaid subcontractors can still file claims of lien, and those liens can be registered against the titles of the strata lots. Under section 34 of the Builders Lien Act, claimants under one contractor can recover up to the greater of what the strata still owes that contractor and the holdback it was required to keep. A strata that paid in full can end up paying up to the 10% a second time.
Is the Construction Prompt Payment Act in force in BC?
Not yet. It received Royal Assent on November 27, 2025, and the Province's page, updated August 20, 2026, says regulations and an adjudication authority are still being put in place. It will apply only to contracts made after it comes into force. In a spring 2026 discussion paper the Province proposed applying it to all public and private projects at once.
Will the prompt payment law apply to strata corporations?
As passed, it defines an owner as any person who retains a contractor for an improvement, which includes a strata corporation that hires a roofer or envelope contractor. The Act lets the Province exempt some improvements or contracts by regulation, and the regulations hadn't been made as of the Province's August 2026 update. Once it applies, a strata must pay a proper invoice within 28 days or give a notice of non-payment within 14 days.
