A strata corporation cannot arbitrarily withhold payment for completed work. Under contract law in British Columbia, once:
- A contractor has performed the agreed-upon work, and
- The work is not in dispute (e.g., no issues with quality, timelines, or scope),
the strata has a legal obligation to pay—regardless of any internal policies, such as requiring an online form. Withholding payment solely for administrative reasons (like a missing form) is legally risky and may result in:
- A small claims lawsuit, or
- A builder’s lien being filed against the property.
Builders Lien Act (BC): Strong Protections for Contractors
If the contractor provided labour or materials to improve real property (e.g., roofing, plumbing, electrical), they may file a builder’s lien within 45 days of:
- Completing the work, or
- Last delivering materials.
A lien can delay property sales, cloud the strata’s title, and force legal proceedings—often a costly and unnecessary risk.
When Is Requiring a Form Enforceable?
It’s perfectly acceptable for the strata to require a contractor to complete an online form—but only if this requirement was clearly stated in advance, such as in a signed contract or work order. If the contractor agreed to:
- Submit an online form as a condition of payment, or
- Follow certain invoicing or compliance procedures,
then the strata can reasonably withhold payment until those steps are completed.
However, if the requirement was not disclosed beforehand, withholding payment is likely unfair and legally indefensible.
Recommended Steps for the Strata
- Review the Contract:
- Was the online form requirement included?
- Did the contractor agree to this in writing before starting work?
- If Not Agreed in Advance:
- Pay the contractor’s invoice promptly.
- Inform the contractor that future payments will require the online form.
- Update Procurement Policies:
- Ensure all contractors are made aware—before work begins—of any administrative requirements, including form submissions.
Requiring administrative steps like form submissions is fine if disclosed up front. But withholding payment after work is completed—based on undisclosed internal processes—could expose the strata to legal and financial consequences.
