Builders Liens Flashcards
What is an Improvement
almost any alteration to the quality of land
What is the Builders Lien Act
A right of lien against holdbacks
Types of Land the Builders Lien Act DOES NOT apply to
Highways
Certain ferry properties
Improvement done by/for the Ministry of Forests
Federal undertakings
Who is exempt from the Builders Liens Act
Federal Crown
Who is subject to the Builders Liens Act
Provincial Crown:
Municipalities
School Boards
Any provincial public facilities
What is a Trust?
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
Who cannot file Liens? (no lien rights)
Anyone whom Engineer/Architects contact with
e.g. sub consultants
Time limits
Lien against:
Improvement (land) = 45 days
Holdback (before its released) = 55 days
Release of Holdback = 55 days
What are the 5 triggers for running time?
- Certificate of Completion of Contract
- Completion of Head Contract (no certificate)
- Completion of Improvement
- Abandonment
- Termination
What is a Certificate of Completion?
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
What are the responsibilities of the Payment Certifier?
-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
Who is the Payment Certifier
Default is Owner/General Contractor
Can be consultant for certain contracts
What does “Completion” mean?
“Completed” in relation to a contract. Substantially completed or performed. (Not totally completed/ performed)
-3-2-1 Formula is used to determine this
Sytnick Case
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)
What is Completion of Head Contract? (No certificate)
“Completed” in relation to a contract.
3-2-1 Formula is used
What is Completion of Improvement?
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
Carmel Pacific Case
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.
What is Abandonment?
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
What is Termination?
Not defined by the Act
Positive act of termination should be clear
Assessed on case by case basis whether termination occured
What is Release of Holdback?
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.
1 year limit to start Lien Action
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.
21 day notice
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
Purpose of Builders Lien act?
-Gives statutory remedy
-To give lien and trust rights, and to be fair to the parties
