BC's New Prompt Payment Law May Face Resistance From Contractors It Aims To Protect, Says Vancouver Lawyer
Ada P. Lam, principal lawyer at Lam Legal - Trial Lawyers, discusses the potential challenges facing BC contractors under the province's new Construction Prompt Payment Act.
Lam Legal's Ada P. Lam says stronger payment protections could benefit BC contractors, but long-standing industry relationships may make enforcement difficult.
If that developer is late making a payment, the subcontractor has to decide whether pushing for payment is worth potentially damaging that relationship.” - Ada P. Lam, Principal Lawyer, Lam Legal - Trial LawyersVANCOUVER, BRITISH COLUMBIA, CANADA, October 22, 2026 /EINPresswire / -- British Columbia's upcoming Construction Prompt Payment Act promises faster payments and quicker dispute resolution across the construction sector. But a Vancouver litigation lawyer says the law's success may depend on whether smaller contractors are willing to enforce their new rights.Ada P. Lam, principal lawyer at Lam Legal - Trial Lawyers, says payment delays have long been a problem for smaller contractors and subcontractors, who may wait 60, 90 or even 120 days to get paid while continuing to cover labour, materials and operating expenses.
"For smaller contractors, waiting months to get paid can create serious cash-flow problems," says Lam. "They're still expected to pay their employees and suppliers, and often to keep working on the project. Essentially, they can end up financing construction projects out of their own pockets."
What Are the Prompt Payment Act's Proper Invoice Requirements and Payment Timelines?
BC's Construction Prompt Payment Act, which received Royal Assent in November 2025 but has not yet come into force, generally requires owners to pay contractors within 28 days of the invoice date, defined as the date a "proper invoice" is submitted to the owner. Additional payment timelines apply further down the contractual chain. Contractors generally must pay subcontractors within seven days of receiving the relevant payment, subcontractors must pay their own subcontractors within a further seven days.
The prompt payment legislation also introduces interim adjudication, a dispute resolution process intended to resolve payment-related disputes much faster than conventional court proceedings. The new prompt payment regime will operate alongside the Builders Lien Act, including its statutory holdback requirements.
Why Could Payment Disputes Strain Construction Industry Relationships?
Lam welcomes the changes but believes commercial relationships could complicate their implementation.
"A subcontractor might depend on a developer for work on three or four different projects," Lam explains. "If that developer is late making a payment, the subcontractor has to decide whether pushing for payment is worth potentially damaging that relationship."
A 2022 survey by the Construction Design Alliance of Ontario found that 42% of respondents who were unwilling to consider adjudication cited concerns about damaging business relationships. The findings suggest similar challenges could arise in BC.
Another challenge could involve written agreements with supplementary conditions seeking to preserve existing payment terms. Anecdotally, Lam has heard of contractors in other prompt payment jurisdictions complaining about owners or developers attempting to circumvent the legislation. As currently set out in the Act, any contractual attempt to waive or override the Act's protections is void.
What Should Contractors Know About Construction Contracts and Notice of Non-Payment Deadlines?
Lam also expects companies to struggle with administrative deadlines, particularly the requirement for owners to provide written notices of non-payment within the prescribed period.
"What happens when an owner has legitimate concerns about the work but issues its notice of non-payment late?" Lam asks. "That's the kind of situation where the parties may have to decide whether to insist on strict compliance or accommodate the delay to preserve their working relationship."
Despite these challenges, Lam believes the new legislation could benefit construction industry participants by encouraging fair and timely payment.
"Owners and developers don't want projects stopping because of payment disputes either," she says. "If the industry as a whole gets behind prompt payment, I think everyone stands to benefit."
Lam's full commentary, Will BC's Prompt Payment Act Actually Work? A Construction Lawyer's Perspective, looks at the challenges of implementing the legislation and what contractors, subcontractors and developers should consider before it takes effect.
About Lam Legal
Lam Legal is a British Columbia litigation law firm based in Vancouver, providing legal representation in business and commercial disputes, construction litigation and estate litigation.
Herman Cheng
Lam Legal - Trial Lawyers
+1 778-325-7507
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BC Prompt Payment Act: Will Contractors Actually Get Paid Faster?
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