Liens

Question 1

construction lien (builders lien)

Answer 1

a claim made against a property by a contractor or subcontractor who has not been paid for work done on that property

• registering a lien makes it hard for the owner to sell or borrow again until the lien is removed

Question 2

when can a lien become a claim?

Answer 2

when it is proven in court. need legal action to perfect the lien

Question 3

who can claim a lien?

Answer 3

workers, contractors, subcontractors etc… anyone who provided services on the property

-liens must be paid out before the mortgage when property is sold

Question 4

trust provision

Answer 4

a legal mechanism for separating legal interest in property from equitable interest

Question 5

quasi criminal penalties

Answer 5

penalties that have some but not all of the qualities of a criminal prosecution

Question 6

holdback (retainage)

Answer 6

• a provincial lien act
• ensures those working for the general contractor are paid
• a percent of the contract value that must be withheld from each progress draw, not be paid out until certain time periods have passed and conditions have been met
• owner holdback 10% of each contractor invoice
• help with dealing with liens at the end of a project

Question 7

can a lien be placed against a hold back?

Answer 7

yes. instead of on the property

Question 8

how to avoid paying large liens?

Answer 8

request performance bonds and labour material bonds