The subject of Builders Liens is much discussed, but little
understood. Industry participants with considerable
experience often still misunderstand many of the central rights and
remedies provided by the legislation.
The following is intended as a primer (or reminder) of some of
the fundamental concepts of the Builders Lien Act.
What is a lien?
A lien is a simple and cost effective tool for securing the
recovery of unpaid contract amounts owed to construction industry
A lien is intended to give those who have assisted in the
improvement of land an interest in that land or the improvement
until such time as they are paid. Section 2 of the
Builders Lien Act provides a lien for contractors,
subcontractors, and workers for the price of the work and material
to the extent that the price remains unpaid, on the owner's
interest in the land, the improvement, and the material itself
placed on the land. Consultants may file liens as well
although a sub-consultant is not entitled to a lien.
A lien holder obtains a right to have a specific interest in the
land sold and to be paid from the proceeds of such sale.
In the absence of that secured claim against the land and
improvement, a lien claimant would be left with nothing more than
its contractual claims.
Another type of lien, peculiar to British Columbia, is the
holdback lien (commonly known as a Shimco Lien) which gives the
lien holder a right to be paid from the holdback funds held on the
What can be liened?
"Land" and "improvements" are central
concepts in the Act and generally speaking any land or any
interest in land (e.g. a leasehold interest) that is registered at
the Land Titles Office can be liened. In addition,
holdback funds can be liened.
Land and improvements that cannot be liened include federal land
and federal undertakings as well as highways.
When must a lien be filed?
The key time period to keep in mind with respect to filing a
land lien is 45 days. A lien must be filed prior to 45
days from the:
issuance of a certificate of completion for the contract
completion, termination, or abandonment of the head contract,
if there is a head contract;
completion or abandonment of the improvement, if there is no
head contract; or
the first sale or occupancy of a strata lot.
A failure to file a land lien within the requisite 45 day period
of time will result in the absolute cancellation of that lien.
There is no equivalent time period for holdback liens.
However, the holdback must still be in existence for the holdback
lien to have any effect. Once the holdback is paid,
generally 55 days after completion, your ability to successfully
claim a holdback lien will have ended.
How to file a lien
To make a claim of lien against the land a lien claimant must
complete a simple document called a "Claim of Lien" which
then must be filed in person at the Land Title Office. It
is important to note that when completing this document you must be
absolutely precise with respect to the name of the owner, the
contracting parties, and the description of the title to the land
that you intend to lien, or the lien may found to be
Holdback liens are brought by commencing an action in Supreme
Court claiming a lien against the holdback .
So you have a lien: how do you get
A lien must proved in the Supreme Court of British
Columbia. Accordingly, to enforce the lien, an action must
be commenced. As with the lien itself there are time
limits here that a lien claimant must be aware of. A lien
action must be commenced within a year of filing the lien or within
21 days of a demand being made by the Owner of the lands that a
lien claimant commence its action.
To protect your claim, a lien claimant must also file a document
known as a Certificate of Pending Litigation (CPL) with the Land
A failure to commence your action within time or to file a CPL
will result in the absolute cancellation of the land
How to improve your chances of getting paid in the first
Of course, it is far preferable to simply be paid for your work
in the first place rather than worry about the intricacies of the
LienAct and any associated litigation
costs. While sometimes you couldn't have done anything
differently, you should always make sure that you have a clear
written contract, that you bill regularly in accordance with that
contract, and that you stay on top of your accounts
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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