Builder Liens Flashcards
What is Builder Lien’s Act?
An act that protects contractors when dealing with non-paying clients. Provides a form of security to contractors, subcontractors and workers.
What does “Improvement” mean in Building Lien’s Act?
Improvement includes any progress made in construction, erection, building, altering on or under the LAND. The improvement adds a physical value to the project.
In explanation:
There is no improvement when the construction has not started. No change to the land was made.
Therefore the designer can not file a lien complaint against the land if there has been no physical change in the land.
What’s the relationship between Liens and Holdbacks?
Builder Lien Act holds the right against holdback which is independent of the right to lien land.
What is a Holdback?
It is the last 10% of the total value of the contract. It’s the 10% that the owner holds from the contractor towards the end of the job. It holds back until all the work is complete. This exist to protect you from possible lien claims.
If there is no lien filed, the holdback value is paid to the contractors. If you make a lien claim against holdback, you’re starting an action
What type of lands do Builder Lien act apply to?
All but Highways, Improvements done by or for the Ministry of Forest, and Federal undertakings.
Not all lands are treated the same as well.
What does “The Trust” mean in Builder’s Lien Act?
trust on funds receieved from contractors/sub contractors for an improvement.
They much use these funds to pay their subcontractors, material suppliers, and workers on that project
Trust moneys can not be use for other purposes until all trust has been paid
Who can file Liens?
Engineers can.
Whoever the engineer contracted to, such as sub-consultant, cannot file lien. Therefore no holdback/trust provisions will be applied to payments made to Engineers
Architects can.
Subconsultant to Architects/engineer - no lien rights and trust rights.
Explain the “Time Limits” for Builder’s Lien Act
There is a time limit. Anything past the limit will lose the lien rights.
You can file earlier, but not later.
Lien against Improvement of Land - 45 days
Lien against Holdbacks - 55 days (before holdback is released)
Release of Holdback - 55 days.
Explain the “Time Limits” for Builder’s Lien Act
There is a time limit. Anything past the limit will lose the lien rights.
You can file earlier, but not later.
Lien against Improvement of Land - 45 days
Lien against Holdbacks - 55 days (before holdback is released)
Release of Holdback - 55 days.
List the 5 triggers for Running of Time
1) Certificate of Completion of Contract
2) Completion of Head Contract where there is no certificate
3) Completion of Improvement
4) Abandonment
5) Termination
Explain what does “Certificate of Completion mean”
Role of Payment Certifier is engaged when the contract is completed. This triggers the time for filing liens and release of lien holdbacks. They are responsible to assess whether if the contract is complete. Once time is triggered, this applies to all contracts AND SUBcontracts.
As a consultant, you can be a payment certifier for certain contracts. You cannot be designated as a Payment Certifier without consent.
By default, it is usually the owner or the general contractor.
Also means that the contract is SUBSTANTIALLY COMPLETED. Not total completion. 3-2-1 method
What are the Role Responsibilites of a Payment Certifier?
Within 10 days of request, you need to determine if the contract is complete and then issue Certification of Completion.
Within 7 days of issuance (formal time), you have to deliver that certification to everyone and post the certificate in prominent place on site.
Keep track of all requests for possible ongoing obligation to advise when the contract is compelte.
Builder Lien’s Act creates liability for failure in payment certifications.
Do you remember what happened in the Sytnick Case?
Plaintiff (the one to sue) wanted to file lien. Their contract was completed on Jan 11 and he wanted to file on march 24. This doesn’t work because the period to file lien is 55 days from the completion of the contract. Hence the expiry was feb 26.
Plaintiff filed past the expiry date therefore it’s not approved. Even if the certificate to confirm the completion was given 45 days after the contract completion, it doesn’t extend the time for filing.
Do you remember what happened in the Sytnick Case?
Plaintiff (the one to sue) wanted to file lien. Their contract was completed on Jan 11 and he wanted to file on march 24. This doesn’t work because the period to file lien is 55 days from the completion of the contract. Hence the expiry was feb 26.
Plaintiff filed past the expiry date therefore it’s not approved. Even if the certificate to confirm the completion was given 45 days after the contract completion, it doesn’t extend the time for filing.
What is considered as “contract completion”?
You can assess whether if the improvement is there and complete. Improvement is complete when the substantial part of the contract is ready to use.
