Builders Liens

Question 1

What is an Improvement

Answer 1

almost any alteration to the quality of land

Question 2

What is the Builders Lien Act

Answer 2

A right of lien against holdbacks

Question 3

Types of Land the Builders Lien Act DOES NOT apply to

Answer 3

Highways
Certain ferry properties
Improvement done by/for the Ministry of Forests
Federal undertakings

Question 4

Who is exempt from the Builders Liens Act

Answer 4

Federal Crown

Question 5

Who is subject to the Builders Liens Act

Answer 5

Provincial Crown:
Municipalities
School Boards
Any provincial public facilities

Question 6

What is a Trust?

Answer 6

funds received by contractors and sub-contractors for an improvement to pay their sub-contractors, material suppliers, and workers
-Cannot be used for other purposes until all the trust beneficiaries have been paid

Question 7

Who cannot file Liens? (no lien rights)

Answer 7

Anyone whom Engineer/Architects contact with
e.g. sub consultants

Question 8

Time limits

Answer 8

Lien against:
Improvement (land) = 45 days
Holdback (before its released) = 55 days
Release of Holdback = 55 days

Question 9

What are the 5 triggers for running time?

Answer 9

1. Certificate of Completion of Contract
2. Completion of Head Contract (no certificate)
3. Completion of Improvement
4. Abandonment
5. Termination

Question 10

What is a Certificate of Completion?

Answer 10

The contractor, sub-contractor, material supplier can make a request for a determination whether a contract is complete
-Date of issuance triggers running of time

Question 11

What are the responsibilities of the Payment Certifier?

Answer 11

-Assess and issue if the contract is complete (within 10 days of request)
-Must deliver Certification of Completion to all (within 7 days)
-Must post it in a prominent place on-site (within 7 days)
-Must keep track of requests

Question 12

Who is the Payment Certifier

Answer 12

Default is Owner/General Contractor
Can be consultant for certain contracts

Question 13

What does “Completion” mean?

Answer 13

“Completed” in relation to a contract. Substantially completed or performed. (Not totally completed/ performed)
-3-2-1 Formula is used to determine this

Question 14

Sytnick Case

Answer 14

Plaintiffs (contractor) contracted with Defendant to construct roads and install water and sewer lines for development
Dispute arose as to price for work
Plaintiffs filed Lien about when the lien period expires
Substantial performance completed before issues of Certificate of Completion
Verdict: Certificate of Completion is not determinative if substantial performance of the contract occurred on an earlier date. (more than 45 days)

Question 15

What is Completion of Head Contract? (No certificate)

Answer 15

“Completed” in relation to a contract.
3-2-1 Formula is used

Question 16

What is Completion of Improvement?

Answer 16

Assessing whether the improvement is complete, rather than the contract.
Improvement is completed if a substantial part is ready for use or is being used for the purpose intended

Question 17

Carmel Pacific Case

Answer 17

Construction manager files lien from house construction. Owner applied to have lien removed bc it was not filed in time. No certificate of completion.
Court of Appeal verdict: bc its a management contract, not head contract, have to see whether the improvement was ready for use.

Question 18

What is Abandonment?

Answer 18

After 30 days of no work, unless work is stopped by strike, lockout, sickness, weather, holidays, court order, shortage of material or other similar clause

Question 19

What is Termination?

Answer 19

Not defined by the Act
Positive act of termination should be clear
Assessed on case by case basis whether termination occured

Question 20

What is Release of Holdback?

Answer 20

If there are no claims of liens files/no actions started to claim lien against holdback after 55 days, holdback can be released.
Can conduct searches in Land Title Office and Court Registry to see if there were actions.

Question 21

1 year limit to start Lien Action

Answer 21

Lien claimant must start action to enforce lien within 1 year of filing lien. Must also file Certificate of Pending Litigation in Land Title Office within 1 year of filing lien. Or else, the lien expires.

Question 22

21 day notice

Answer 22

Owner can deliever notice to lien claimant to begin action and file Certificate of Pending Litigation within 21 days of service of notice. Or else, lien expires.
This forces lien claimant to decide in less than 1 year whether its worth beginning action.
To resolve lien claims faster

Question 23

Purpose of Builders Lien act?

Answer 23

-Gives statutory remedy
-To give lien and trust rights, and to be fair to the parties