There are many different players involved in a construction project, and many different sources of risk. The Construction Act provides tools to allow these players to assess that risk and to protect themselves, but it is up to them to take advantage of such tools. One very useful, and often underutilized example, is the “request for information”.
Section 39 of the Construction Act requires parties involved in a construction project to deliver information relating to the project to other parties after receiving a written request from them to do so. There is no specific form that constitutes a request for information, which is described in the Act as simply “a written request”. The information must be delivered within twenty-one days of the receipt of the written request.
Section 39 allows any person who has a lien, benefits from a trust, or who is a mortgagee to request certain information at any time. The information that may be requested varies depends on the party from whom information is being requested. A breakdown of what information can be requested is as follows:
From an Owner or Contractor
- the names of the parties to the contract, the date on which the contract was entered into and the date on which any applicable procurement process was commenced,
- the contract price,
- a state of accounts between the owner and the contractor,
- a copy of any labour and material payment bond in respect of the contract posted by the contractor with the owner,
- a statement of whether the contract provides in writing that liens shall arise and expire on a lot-by-lot basis, and
- a statement of whether the contract provides that payment under the contract shall be based on the completion of specified phases or the reaching of other milestones in its completion.
From a Contractor or Subcontractor:
- the names of the parties to a subcontract and the date on which the subcontract was entered into,
- a state of accounts between the contractor and a subcontractor, or between a subcontractor and another subcontractor,
- a statement of whether there is a provision in a subcontract providing for certification of the subcontract,
- a statement of whether a subcontract has been certified as complete, and
- a copy of any labour and material payment bond posted by a subcontractor with the contractor or by a subcontractor with another subcontractor.
From an Owner who is Selling the Property as a Residential Home (a Developer)
- the name and address of the purchaser, the sale price, the amount of the purchase price paid or to be paid prior to the conveyance, the scheduled date of the conveyance and the lot and plan number or other legal description of the premises as contained in the agreement of purchase and sale, and
- the date on which a permit authorizing occupancy or a certificate of completion and possession has been issued.
From a Landlord who is Paying for Some or All of the Project as a Tenant Allowance
- the names of the parties to the lease,
- the amount of the tenant allowance, and
- the state of accounts between the landlord and the tenant.
From a Mortgagee or Unpaid Vendor
- sufficient details concerning any mortgage on the premises to enable the person who requests the information to determine whether the mortgage was taken by the mortgagee for the purposes of financing the making of the improvement,
- a statement showing the amount advanced under the mortgage, the dates of those advances, and any arrears in payment including any arrears in the payment of interest, or
- a statement showing the amount secured under the agreement of purchase and sale and any arrears in payment including any arrears in the payment of interest.
State of Accounts
Where a “state of accounts” may be requested (as set out above), the contents of such a state of accounts must include the following:
- the price of the services or materials that have been supplied under the contract or subcontract,
- the amounts paid under the contract or subcontract,
- in the case of a state of accounts from a landlord, which of the amounts paid under the contract or subcontract constitute the tenant allowance,
- the amount of the applicable holdbacks,
- the balance owed under the contract or subcontract,
- any amount retained as a set-off by trustee or a lien set-off, and
- any other information that may be prescribed.
If the recipient of a request for information does not provide the required information, or knowingly or negligently misstates the information, they will themselves be liable for any damages suffered as a result.
As the above list makes clear, a request for information can be a powerful way for a party to a construction project to obtain important information that will allow them to assess risk and take steps to protect themselves.
As always, a brief consultation with counsel experienced in construction law before engaging in a major project will assist contractors in being aware of, and making the best use of, the tools available under the Construction Act.