Holdback release in Alberta: when subcontractors get their 10% back

The short version

On a lienable job in Alberta, the owner must keep back 10% of the value of the work done. That holdback is held for 60 days (90 days for work primarily related to concrete) from the date a certificate of substantial performance is issued, or from completion if no certificate is issued. If no lien is registered when that period ends, the holdback can be paid out. The Act lets a certificate be issued for your subcontract alone, which can get your 10% released before the whole project finishes.

• 10% of the value of work done and materials furnished is retained by the owner (section 18).
• 60 days from the certificate of substantial performance, or 90 days for concrete work (sections 18, 21).
• A certificate can cover one subcontract, and the 60 days then run for that subcontract (sections 19(2), 21(2)).
• Whoever issues the certificate must make it visible to the people on site within 3 days (section 20).
• Contracts over $10 million can release holdback annually or by phases, if no liens are outstanding (section 24.1; regulation section 2).

This guide goes deeper on holdback only. For invoice deadlines, notices of non-payment and adjudication basics, see the prompt payment guide.

Who holds the 10%?

The Act puts the duty on the owner. Section 18(1) says an owner liable on a contract under which a lien may arise must retain 10% of the value of the work actually done and materials actually furnished, whether the contract pays in instalments or on completion. A mortgagee who disburses for the owner can hold it instead (section 26).

Whether your GC also holds 10% back from you, and on what terms, is set by your subcontract. Check the holdback clause before you sign: see the subcontract checklist.

How long is holdback held in Alberta?

The last row matters. Work done after the certificate date, such as deficiency and close-out work, has its own 10% holdback. That one is held for 60 days from completion, not from the certificate.

What starts the clock: substantial performance

Section 2 defines it. A contract or subcontract is substantially performed when:

1. the work, or a substantial part of it, is ready for use or being used for its intended purpose, and
2. the remaining work can be completed or corrected for no more than:

Example: on an $800,000 subcontract, the cap is 3% of $500,000 ($15,000) plus 2% of $300,000 ($6,000), so $21,000 of work left at most.

If the remaining work cannot be finished quickly for reasons outside the contractor's or sub's control, its value is deducted from the price when testing substantial performance (section 3).

Can a subcontractor get a certificate for its own work?

Yes. Section 19(2): where a contractor or a subcontractor believes the subcontract is substantially performed, either of them may issue a certificate of substantial performance for that subcontract and deliver it to the owner. The certificate must show the date it was issued (section 19(3)).

Then section 21(2) applies: once 60 days have passed from that certificate and no lien has been registered, the owner's required holdback drops by 10% of the value of the work done under that subcontract. For concrete, it is 90 days (section 21(4.1)).

For an early trade, such as excavation, foundations or structural steel, this is the difference between waiting for the whole building and waiting two months after your own scope.

Posting the certificate

Whoever issues the certificate must, within 3 days, give the people working or supplying materials a reasonable chance to see it by either:

• posting a signed copy in a conspicuous place on the job site, or
• providing an electronic copy of the signed certificate as the contract or agreement provides.

An issuer who fails to do this is liable for the costs and damages that result (section 20(2)).

When is holdback paid out?

Section 27(2) says that once 60 days have passed from the certificate, the owner may validly pay out the holdback for work before the certificate, unless a statement of lien is registered. The holdback for work after the certificate may be paid out 60 days after completion. For concrete, both are 90 days (section 27(2.21)).

Note the wording: the Act says payment may be validly made. For an ordinary contract, it does not set a separate countdown for when the owner must release holdback, or for passing it down to subs. Two rules still help you:

• Prompt payment. Payments under Part 3 are subject to the holdback rules (section 32.1(2)). Once your holdback is released and included in a proper invoice, the proper invoice deadlines are the reasonable reading: 28 days owner to GC, then 7 days GC to you (sections 32.2, 32.3). Your contract may also set a date.
• Adjudication. Payment or non-payment of holdback owed during or at the end of a contract or subcontract is a matter you can take to adjudication (regulation section 19(d)). See construction adjudication.

Holdback paid after the certificate is trust money

Under section 22, when the owner pays after a certificate is issued, whoever receives that payment holds it in trust, to the extent they owe the people who did the work covered by the certificate. The same applies at each level below. The trust ends when the money is paid to the person owed. The Act does not say a separate bank account is required.

Annual and phased release on large contracts

Section 24.1 says an owner must pay out accrued holdback before the end of the job when all of these are true:

• the contract has a completion schedule longer than one year with annual holdback payments, or it specifies phased payments;
• the contract price, when signed, exceeds $10,000,000 (regulation section 2(2));
• on the payment date, there are no liens filed, or all have been satisfied, discharged or provided for.

If the contract does not specify phases, release is annual (regulation section 2(1)). Alberta's prompt payment page adds that phases must be less than one year and must be clearly defined. Where they are unclear, annual release applies.

What happens to holdback if a lien is registered?

• The holdback stays put. No early or end-of-job release is valid while a lien is registered (sections 21, 27).
• More money is held. While a lien is registered, the owner must also retain any unpaid amount above the 10% (section 18(2)).
• There is a cap. A sub's lien against the holdback is limited to 10% of the value of the work by the contractor or sub it worked for, plus any amount due and unpaid to that contractor or sub (section 18(3)).
• Paying into court. The owner can pay the holdback into court or post security. That money then stands in place of the land, and the lien is removed from title (section 27(3), (5)).

How to register one is in the lien guide.

Interest on late holdback

Section 32.6 says interest accrues on amounts in a proper invoice that are unpaid and due. The rate is the one in your contract or, if none, the rate under the Judgment Interest Regulation (regulation section 4). Bill your holdback on a proper invoice so this applies.

The lien deadline does not wait for holdback

This is the trap. Your lien deadline is 60 days from completing your subcontract (90 for concrete) (section 41(4)). Your holdback period runs from the certificate, which may come months later, after the main contract is done.

If you are owed holdback and your lien deadline is near, do not wait for the release date. Once the period ends with no lien registered, the owner can validly pay out the holdback (section 27). If the money then stops above you, you may have no lien left. Regulation section 36 also says the 90-day lien period does not apply to entities that install or use ready-mix concrete.

What to do this week

• Write down two dates for every job: the day your scope was finished (your lien clock) and the certificate date (your holdback clock).
• Ask for a certificate for your own subcontract once you meet the 3%/2%/1% test. Section 19(2) lets you issue it yourself.
• Demand the facts in writing. A sub working on the project can demand the contract and a statement of accounts. A lienholder can too. The other side has 6 days to produce it (section 33).
• Invoice the holdback on a proper invoice as soon as the period ends, and keep the delivery record.
• Diarize the 30-day adjudication limit. Adjudication generally cannot start more than 30 days after final payment under your subcontract, and holdback is often that final payment (section 33.4(2)).

Working commercial jobs around Calgary? Syndex is a free network where GCs send requests to the subcontractors in the trade they need. Join as a subcontractor.

Sources

• Prompt Payment and Construction Lien Act, RSA 2000, c P-26.4 (consolidated to April 1, 2025)
• Prompt Payment and Adjudication Regulation, Alta Reg 23/2022 (consolidated to November 26, 2025)
• Prompt payment rules for construction industry, Government of Alberta

Last checked October 13, 2026.