When can I release the holdback to my contractor?

In Ontario, you can release the holdback to your contractor 60 days after substantial completion of the work, provided no liens have been filed against your property.

Under Ontario's Construction Act (formerly the Construction Lien Act), you're required to hold back 10% of the contract price until this 60-day period expires. This holdback protects you from potential liens that subcontractors or suppliers might file if they haven't been paid by your general contractor.

The 60-Day Timeline in Ottawa

The clock starts ticking from "substantial completion" - which means the work is essentially finished and you can use the space for its intended purpose, even if minor deficiencies remain. Your contractor should provide written notice of substantial completion, and you should document this date carefully.

During these 60 days, any unpaid subcontractors, suppliers, or workers have the right to file a construction lien against your Ottawa property. If liens are filed, you cannot release the holdback until those liens are resolved - either paid, bonded off, or successfully challenged.

Before Releasing the Holdback

Check the Ontario Personal Property Security Registration system online to confirm no liens have been registered against your property. You can search by your property address or legal description. Even if you haven't received formal notice of a lien, one might still be registered.

Also ensure all deficiencies have been addressed and you've received any required permits and inspections. For electrical work, confirm the ESA (Electrical Safety Authority) has issued final approval. For gas work, verify TSSA (Technical Standards and Safety Authority) sign-off. The City of Ottawa Building Code Services (613-580-2424) should have issued final occupancy if required for your project.

What to Watch For

Be cautious if your contractor pressures you to release the holdback early or claims the 60-day rule doesn't apply. Some contractors may offer small discounts for early release, but this eliminates your legal protection. The holdback requirement exists specifically to protect Ottawa homeowners from having to pay twice if contractors don't pay their suppliers or subcontractors.

Official Resources

For questions about lien searches, contact ServiceOntario or visit ontario.ca/page/personal-property-security-registration. For construction law questions, consult with a lawyer familiar with Ontario's Construction Act. The holdback rules are provincial law that apply to all construction projects in Ottawa and across Ontario, regardless of project size.

Remember: holding back that 10% for the full 60 days is your legal right and protection - don't give it up early unless you're absolutely certain about lien-free completion.