Builder's Lien Act

Question 1

What is a construction lien?

Answer 1

A construction lien is a claim made against a property by a contractor or subcontractor who has not been paid for work done on that property. Construction liens are designed to protect professionals from the risk of not being paid for services rendered

Question 2

Holdback

Answer 2

The person primarily liable on each contract (or subcontract) under which a lien may arise under this Act must retain a holdback equal to 10% of the greater of:

(a) the value of the work or material as they are actually provided under the contract or subcontract, and
(b) the amount of any payment made on account of the contract or subcontract price.

Question 3

Holdback account

Answer 3

The owner must

1. establish at a savings institution a holdback account for each contract under which a lien may arise.
2. pay into the holdback account the amount the owner is required to retain
3. administer the holdback account together with the contractor from whom the holdback was retained.

Question 4

Payment certifier

Answer 4

(usually) an architect, engineer or other person identified in the contract or subcontract as the person responsible for payment certification
* otherwise handled between owner and contractor

Question 5

How quickly must a payment certifier issue a certificate of completion?

Answer 5

Within 10 days after the date of the request (from the contractor or sub), must determine whether the contract or subcontract has been completed and, if the payment certifier determines that it has been completed, the payment certifier must issue a certificate of completion.

Then within 7 days:

1. deliver a copy of the certificate to the owner, the head contractor, if any, and the person at whose request the certificate was issued,
2. post, in a prominent place on the improvement, a notice of certification of completion.

Question 6

Owner’s discharge sum

Answer 6

means an amount that, if paid into court by the owner under section 23, would be sufficient to discharge the owner from liability with respect to all claims of lien filed by persons other than contractors or workers engaged by the owner.