Can a Contractor Put a Lien on My House Without a Contract in BC?

Why the Builders Lien Act Does Not Require a Written Contract

The Act protects payment for labour and materials based on the fact that work was performed according to an agreement, not on the form of the agreement between the parties.

The Act creates a statutory right. This right exists independently of contract law principles that might otherwise require written evidence of an agreement. The BC legislature designed the Act to protect workers, subcontractors, and material suppliers in the construction payment chain, where informal arrangements are common and delays in payment create real financial hardship.

A builders’ lien attaches to the owner’s interest in the land and the improvement. The lien secures payment for the value of work done or materials supplied. The owner is generally required to retain a 10% holdback based on the value of the work or materials provided. This holdback obligation applies whether the contract is written or oral. If the owner fails to retain the holdback, they may be required to pay lien claims up to the required holdback amount.

The rationale is straightforward: a contractor who installs a roof, pours a foundation, or supplies lumber has improved the property. The property owner benefits from that improvement. The Act ensures the person who provided that value has a legal mechanism to collect payment, regardless of the lack of formal paperwork.

How Oral Agreements Create Lien Rights in BC

An oral agreement between a homeowner and a contractor creates the same lien rights as a formal written contract under BC law, provided the work qualifies as an “improvement” under the Act.

The Act defines an “improvement” as any alteration, addition, or repair to land or a building. This includes renovations, new construction, landscaping that alters the land, and the supply of materials used in any of these activities. If a homeowner verbally agrees to have a contractor renovate a kitchen, that contractor is entitled to a lien for any unpaid work they perform.

The critical question is not whether a contract exists on paper. The critical question is whether work or materials were provided for an improvement on the property under an agreement. Courts in British Columbia examine the substance of the arrangement: was there an agreement (in any form) for the contractor to perform work? Did the contractor actually perform that work or supply materials? If yes to both, lien rights may be claimed.

Text messages, emails, verbal discussions witnessed by third parties, and even a pattern of conduct (such as the homeowner allowing workers onto the property and observing work in progress) all serve as evidence of an oral or implied contract. The absence of a signed document does not eliminate the homeowner’s obligation to pay for legitimate work or the contractor’s right to secure that payment through a lien.

When Subcontractors File Liens on Your Home Without Your Knowledge

Homeowners face lien claims from subcontractors they never hired, never spoke to, and never knew existed, because subcontractors hold independent lien rights under the Act.

This is the scenario that surprises most property owners. You hire a general contractor to build a deck. That general contractor hires a framing crew, an electrician, and a lumber supplier. You have no agreement with any of these subcontractors. You may not even know their names. Yet if the general contractor fails to pay them, every one of those subcontractors and suppliers can file a builders’ lien against your property.

The Act grants lien rights to most participants in the construction chain: head contractors, subcontractors, workers, and material suppliers. A subcontractor’s lien rights do not depend on any direct relationship with the property owner. They depend on the fact that the subcontractor provided work or materials for an improvement on the owner’s land. The lien attaches to the owner’s interest in the property, creating a registered charge on the land title.

This is precisely why the Act requires owners to retain the 10% statutory holdback. The holdback acts as a financial limit on the owner’s liability for potential lien claims from subcontractors and suppliers further down the payment chain. Releasing full payment to your general contractor before the 45-day holdback period expires leaves you exposed to lien claims with no funds set aside to satisfy them.

What Makes a Builders Lien Valid or Invalid Without a Contract

A builders’ lien filed without a written contract is valid if the claimant performed qualifying work, filed within the 45-day deadline, and completed the prescribed claim of lien form correctly.

The validity of a builders’ lien depends on procedural compliance with the Act, not on the existence of a written contract. A valid lien requires the claimant to file a Claim of Lien (Form 5) at the Land Title Office within 45 days of a “triggering event”. Common triggering events include the completion or abandonment of the improvement, or completion, abandonment, or termination of the head contract, or the issuance of a Certificate of Completion.

A lien can be challenged as invalid on several grounds that have nothing to do with the contract format. These include: the claimant missed the 45-day filing deadline, the work performed does not qualify as an “improvement” under the Act, the Claim of Lien form contains material errors, such as wrong property identification number, incorrect legal description, or inaccurate claim amount, or the claimant has already been fully paid.

Property owners sometimes assume that the absence of a written contract automatically makes a lien invalid. That assumption is incorrect. If a contractor did real work on your property under a verbal agreement, and you have not paid for that work, the lien is likely valid. The path to removing a builders lien in that situation involves paying the claim, negotiating a settlement, posting security (such as cash or a bond) into court, or applying to the court for an order cancelling the lien if you have a legitimate defence.

How to Protect Your Home from Unexpected Lien Claims

Property owners reduce their exposure to lien claims by retaining the statutory holdback, requiring written contracts, and verifying that the general contractor pays the full supply chain.

The first and most important protection is the 10% statutory holdback. Retain 10% of every payment you make to the contractor. Do not release this holdback until 55 days after the “triggering event” (usually the issuance of a Certificate of Completion or the completion, abandonment of the head contract, or completion or abandonment of the improvement). Only release the funds if no liens have been filed against your property during that period. This is not optional: the Act requires it, and failure to hold back creates personal liability.

Second, use a written contract for every construction project, regardless of size. A written contract does not prevent lien claims, but it establishes clear terms for scope, price, payment schedule, and completion dates. These terms become critical evidence if a dispute arises. The contract should include a clause requiring the contractor to provide lien waivers from all subcontractors and suppliers upon each payment.

Third, request statutory declarations from your contractor confirming that all subcontractors and suppliers have been paid before you release any progress payment. This creates a paper trail and shifts accountability to the contractor if subcontractor liens surface later.

Fourth, conduct a title search before making final payment. A construction lien lawyer can verify whether any liens have been registered against your property at the Land Title Office. This simple step prevents you from paying the contractor in full while unknown lien claims remain outstanding.

Fifth, verify your contractor’s licensing and insurance. BC Housing regulates residential builders in British Columbia under the Homeowner Protection Act. A licensed contractor with proper insurance represents a lower risk of payment chain failures that lead to lien claims.

What Homeowners Get Wrong About Builders Liens and Contracts

The most common mistake homeowners make is believing that no written contract means no legal exposure to a builders’ lien on their property.

This misunderstanding leads to three costly errors. First, homeowners pay the full contract price to the general contractor without retaining the 10% statutory holdback, assuming that a verbal deal carries no lien consequences. When a subcontractor files a lien weeks later, the homeowner has no holdback funds available to satisfy the claim and may be forced to pay that 10% to the subcontractor just to clear the lien from their title.

Second, homeowners ignore lien filings because they believe a lien based on an oral agreement will not hold up. Under the Act, the owner must respond to a filed lien regardless of the contract type. If the lien claimant commences a court action to enforce the lien and the owner does not respond, the claimant can obtain a judgment and force a sale of the property to recover the amount owed.

Third, homeowners attempt to resolve lien disputes without legal advice, unaware that the Act imposes strict timelines that can be used to their advantage. An owner can serve a “21-Day Notice”, which forces the contractor to either start a lawsuit immediately or lose their lien rights. Failing to use these procedural tools correctly can leave a “dead” lien on your title for up to a year or more.