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Legal Ease
Legal Ease, Lawyer
Category: Canada Law
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Experience:  Lawyer
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We worked for the company doing the 407 extension in the

Customer Question

Hi. We worked for the company doing the 407 extension in the Durham region. While they paid their invoices in full, we were instructed to deduct the 10% holdback from each invoice. When our contract was completed we wanted to invoice the holdbacks and were told we had to wait for til the end of the entire project for the holdbacks to be released. That is estimated to be 2020 or 2021!!! Is this legal?? Is there a resource for documents to support this?? Thanks
Submitted: 3 months ago.
Category: Canada Law
Expert:  Legal Ease replied 3 months ago.

No it is not legal. You don't have to wait for years to be paid. That is nonsense.

You should be paid in full by the contractor now.

The most you should have to wait is 45 days.

On top of that if there was no agreement that you deduct the holdback then you do not have to do so. They had to pay you at once.

I suggest that you send them a letter by Registered Mail and in the letter demand full payment by a deadline that you set.

Tell them if they fail to comply you will commence legal proceedings and then will be seeking interest and your costs.

You can sue them in Small Claims Court and can self-represent and if it gets that far and you find you need some help as you go through the process you can always post on this site again and I can assist you further.

Please feel free to post back with any follow-up questions you may have. If you don't have any then I hope I have earned a 5 star rating but if you don't feel that I have please don't hesitate to reply back and let me know what more I can do to assist you. Finally, please know that even after you rate me I will be here for you and you can ask follow-up questions if you think of them later on at no further charge of course.

Customer: replied 3 months ago.
Is there anywhere I can print off any supporting documents to spur them to pay without the expense and bother of small claims court. Thank you for your answer.
Expert:  Legal Ease replied 3 months ago.

This article explains how holdbacks work;

https://gowlingwlg.com/en/canada/insights-resources/when-is-holdback-no-longer-holdback-

But the holdback is what the owner will be personally liable to the subcontractors for if the contractor doesn't pay them. It is not meant for the sub-contractor not to be paid.

The owner can pay the subcontrators directly or the contractor has to pay you, the subcontracot in full.

But mainly this is about contract law. The holdback has nothing to do with you. It is between the contractor and the owner.

Your contract is with the contractor and your agreement is that you are to be paid in full when the work is done.

Expert:  Legal Ease replied 3 months ago.

Is there anything more I can help you with at this point in time?

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