Builder's Lien Flashcards
What is improvement in Builder’s Lien Act
- anything made, erected, built, construction
- on or under land
- and attached to or intended to become part of it
What does BLA do?
- Creates Right of Lien against holdback
- Holdback = 10% of every payment in contract
- No liens filed -> Holdback is paid
Types of land not subject to BLA?
- Ferry properties
- Federal undertaking
- Highways
- Improvement done by Ministry of Forest
Requirement of BLA?
“Owner” requested the improvement
How can landlords protect themselves against liens
By filing “notice of interest” on the title to the land
Types of owner under BLA?
Exempt
- Federal crown and their agents
Subject:
- Provincial crown and their agents
- School boards
- Municipalities
- Provincial public facility
What is the trust?
- BLA imposes a trust on funds received from contractors / sub-constractors for improvement. $ should be used to pay sub-contractors, workers, and material suppliers.
- $ cant be used as other purposes until paying all trust beneficiaries
- Beneficiaries can track improperly used $
Engineers - Lien Rights and Trust Obligations
- Engineers can file lien, but not ppl work for engineers.
- no holdback / trust provision applies to engineers payment
Time limits under BLA
- can file lien eariler, but not later
- Lien against improvement = 45days
- Lien aginst holdback = before holdback is released
- Release of holdback = 55days
5 Triggers of Running of Time
- Certificate of Completion of Contract
- Completion of Head Contract / Improvement
- Termination
- Abandonment
3-2-1 formula
- 3% of first $500,000 of contract price
- 2% of second $500,000 of contract price
- 1% of remaining contract price
Will there be an extension if the certificate of completion is issued earlier?
- If contract was completed before issuance of certificate of completion
- No extension
Completion of Head Contract
“Completed” in relation to contract = “substantially completed/performed”
Completion of improvement
- If not considering whether contract complete -> assess whether improvement is complete
- improvement is completed if, substantial part is ready to use or it is being used for the purpose intended
Abandonment
Deemed abandonment w/ 30 days of no work
Unless stoppage by lockout, weather, holiday, strike
Termination
- Not defined by BLA
- Will be assessed on case by case basis whether terminatino occurred
Deadline for initiating lien action
- Within 1yr of filing lien, claimant must start action to enfore lien, and file CPL (Certificate of Pending Litigation) in land title office
Discuss the 21 day notice
- Owner can deliver notice to lien claimant to commence action and file CPL within 21 days of service of notice
- Forces claimant to decide in 1yr, whether worth commencing or not
- Enables faster resoultion
What is a Lien?
A claim which can be made against title to property in an effort to secure the recovery of money owing the lien claimant
What is Contract A
- process contract
- arises between owner and contractor immediately after bid is submitted
- without further formalities
What is contract B
- Bidding contract contains another term
- Where bidder will enter into a formal construction contract if the owner awards it to him
