Builders Liens are an essential tool for those that need to collect monies owed to them in relation to an improvement to land in British Columbia. The Builders Lien Act (BLA) defines “improvement” as including “anything made, constructed, erected, built, altered, repaired or added to, in, on or under land, and attached to it or intended to become a part of it, and also includes any clearing, excavating, digging, drilling, tunnelling, filling, grading or ditching of, in, on or under land”. The BLA allows those that do work and/or supply material in relation to an improvement to claim a lien. There are some exceptions to the type of “land” that is lienable, including highways and certain forest service roads.
A claim is generally made by filing a Claim of Lien form at the proper Land Title Office. In order to complete the form correctly, it is necessary to have the exact legal description of the property in question. Setting out the civic address of the property on the form will not suffice. It is also necessary to include how much the claim of lien is for, as well as the name of the party that engaged the lien claimant and a general descript of the work done or the material supplied.
It is very important to keep in mind that there are certain, very strict, limitations involved in properly filing the claim of lien. The BLA states that if a certificate of completion has been issued with respect to a contract or subcontract, the contractor or subcontractor and anybody hired by or under the contractor or subcontractor, has 45 days after the issuing of the certificate to file the claim of lien. If no certificate of completion has been issued, then a claim of lien must be filed no later than 45 days after the head contract is completed, abandoned or terminated, or if there is no head contract, no later than 45 days after the improvement is completed or abandoned. The office that receives claims of lien will not question whether a claim of lien is filed in time. Thus, the mere fact that the claim of lien is accepted for filing does not necessarily mean that it was filed in time.
Once a lien is filed against the title of a property, it can only be removed with the consent of the lien claimant or by court order. Since a lien is registered against the title of the property, it will have the effect of placing a stumbling block to prevent the sale or transfer of the property in question.
Liens are enforced by commencing a lawsuit in Supreme Court. It is sometimes the case, however, that the property owner and lien claimant will solve the issue without reaching that stage. If, however, the parties involved are unable to reach some sort of agreement, the lien claimant faces a further limitation period in that a lawsuit must be commenced no later than one year from the date that the claim of lien was filed. Not only that, but a charge on title of the liened property, called a certificate of pending litigation, must also be filed at the proper Land Title Office within the same limitation period. Once the lawsuit is filed, the litigation process begins and follows its course until the parties either reach an agreement or a judge renders a decision as to what should be done.
To say that the above summary is a very basic overview of how builders lien work in British Columbia is an understatement. The law surrounding builders is lien is a quite intricate and technical. If you are faced with a situation involving a builders lien, whether as a property owner, contractor or subcontractor, we highly recommend that you obtain independent legal advice to explore your rights and obligations. Call us. We can help.