Does the Builders Lien Act require housing providers to hold back 10% of development invoices?
Yes, the Builders Lien Act requires you to hold back 10% of each invoice, for 55 days, from the date substantial completion is declared. You are also required to establish a holdback account for each contract valued at $100,000 or more. BC Housing holds back funds for projects exceeding $5,000. You can use this figure or set a higher amount for holdbacks, when using reliable, reputable contractors you have worked with before. Failure to hold back funds may have negative legal and financial implications. For example, a supplier or subcontractor can place a lien on a development if the contractor fails to pay them, until payment is received. If you hold back 10%, you will limit your liability as owner.
