What is the Builders Lien Act?
The Builders Lien Act helps provide rights and remedies for workers and suppliers for construction projects. These rights and remedies help assure the proper flow of payments from contractors all the way down to suppliers and many in between. For those living in BC, The Builders Lien Act must be adhered to as it is the law.
How Do You Remove a Builders Lien?
You can remove a builders lien one of three ways.
- You can have a lien removed if there is a flaw on the lien, by going to the land titles office and pointing out the flaw with a formal procedure.
- Another way to remove a lien, is by paying the amount of the lien or the amount of the holdback into court. The amount of the holdback may be significantly less than the amount of the lien.
- If no legal proceedings have taken place within a year, you can cancel and remove the builders lien from your property by filling out and submitting Form 17 under the Land Title Act.
For more information on what Builder Liens mean for owners and how to deal with them, visit our Builder Liens For Owners page here.
How Long Do Builders Liens Last in BC?
A builders lien claim will only last for a year from when it was filed unless a legal action is taken by the claimant. This one year period can be shortened to 21 days by sending the claimant a notice to commence an action. This forces the claimant who put the lien on the property, to start a lawsuit. They will have 21 days from the date that they receive that notice to commence an action, to start that lawsuit. If they don’t start a lawsuit within those 21 days, then you can have the lien removed from the title because they failed to meet the statutory requirements.
Who Can File a Builders Lien?
Builders liens can be filed against a property by anyone working on the project ranging from the suppliers to the contractors. Parties which can and may file a builders lien against a property may include but is not limited to:
- Architects
- Engineers
- Suppliers
- General workers
- Contractors
- Subcontractors
If you are a worker or supplier for a construction project visit our Builders Liens for Contractors page to learn more on how to use builders liens to your advantage.
When Can You File a Builders Lien?
A builders lien must be filed within 45 days of substantial completion of the project. If it is not filed within that time, that lien can be removed, because it is considered invalid.
What is a Builder Lien Holdback?
A builders lien holdback is a pool of money which can be used to pay claims. The owner who is having construction work performed is required to hold back 10% of each payment they make to a contractor. The builders lien holdback serves two purposes:
1) It ensures contractors and subcontractors that there is a pool of money available out of which funds can be withdrawn to make payments on any builders lien claims that may be filed. It should be noted that a builders lien holdback does not guarantee the payment of any of those claims, instead it helps provide assurance to contractors and subcontractors that holdback funds are available.
2) It limits the liability of the owner of the who is having work performed from lien claims made against the property. When an owner complies with the holdback provisions of the Builders Lien Act, the owner’s liability is maxed out at either the 10% holdback that they set aside or any unpaid balance of the contracted price, whichever of the two amounts is greater.
How Do You File a Builders Lien?
In order to file a builders lien claim you must first complete Form 5 under the Builders Lien Act. Once you have completed Form 5 you must then register the claim either in person or via mail at the appropriate Land Title Office, depending on where the land involved is registered. You will also need to include a cheque payable to the BC Minister of Finance when registering your claim.
Where Are the Land Title Offices in BC?
There are 3 Land Titles Offices in BC, each city and municipality will fall under one of the following 3 locations:
Kamloops / Nelson
Vancouver / New Westminster
Victoria
For a complete list of what city or municipality falls under what Land Title Office, please visit BC Land Title & Survey.
Why Would Someone File a Builders Lien?
Generally someone would file builders lien against a property when they are not properly compensated for the work they have performed or the supplies they have provided to a construction project. This could be anyone from, suppliers, contractors, subcontractors, engineers, or architects.
How Do You Enforce a Builders Lien?
In order to enforce a builders lien, you must first file the claim. Once you have filed the claim you then must take legal action by starting a lawsuit in Supreme Court. Once you have filed a lawsuit, you must also file a certificate of pending litigation against the property at the Land Title Office where the property is registered under. Once filing your claim, you will have one year to take legal action and sue before your claim becomes invalid. If you require assistance with builder liens, contact our team of experienced construction lawyers.
