Builder's Liens - Powerpoint Flashcards
What does it mean to “Lien”?
The right to keep possession of property or an Improvement until the debt owed by the owner of that property or work is discharged
What is “Improvement” defined as?
Anything made, constructed, added to, repaired, or altered on or under land. Includes clearing, digging, drilling, grading, and filling
There is no improvement if construction does not happen
What does Lien against the Holdback mean?
Where a Lien can be made against the holdback amount during an improvement (independent of the right to lien land)
How much is the Holdback amount?
10% of every pament made on the contract must be retained as holdback. This amount is retained to satisfy any valid lien claims against the land
What types of land are not subject to the Builders Lien Act?
- Highways
- Certain ferry properties
- Improvements done by MInistry of Forest
- Federal undertakings
What are the types of Owners when considering Liens?
- person who owns land
- can be owners of interest in land, such as tenants
How can landlords protect themselves against liens?
By filing a “notice of interest” on the title to the land
What does the Trust mean?
The Builders Lien Act has imposed a trust on funds received by contractors and sub-contractors for an improvement – they must use those funds to pay their sub-contractors, material suppliers and workers on that project
How do Liens apply to Engineers?
Engineers can file liens BUT no one with whom an Engineer contracts can file a lien (e.g. sub-consultants)
SO: no holdback applies to payments made to Engineers, and the trust provisions do not apply to payments made to Engineers
What are the time limits like for Liens?
They are strict - lien rights will be lost if the time limit expires.
Lien against Improvement: 45 days
Lien against Holdback: 55 days
Release of Holdback: 55 days
What are the 5 triggers for running of time?
- Certificate of Completion of Contract
- Completion of Head Contract (where no Certificate)
- Completion of Improvement
- Abandonment
- Termination
Who is the default Payment Certifier, and can you as a consultant be designated Payment Certifier?
Default is Owner or Owner/GC
You can only be made Payment Certifier with your consent
What is the responsibility of the Payment Certifier?
To assess and issue Certificate of Completion if contract is complete
How is the Completion of Head Contract (where no certificate) determined?
Same analysis as with Certificate of Completion - use 3-2-1 rule
How is the Completion of Improvement determined?
Improvement is complete if it or a substantial part is ready to use
