Contractors, trades, and workers commonly use the BC
Builders Lien Act to protect and secure payment of their
work. However, there are certain circumstances when filing a lien
won't help secure payment. It is important to know when to file
a lien, and when filing a lien is a wasted effort. In this article,
we briefly review some of the exclusions and exceptions in the BC
Builder's Lien Act which indicate when a claim of lien
should not be filed and in those circumstances, what other options
are available to you.
Exclusions for Certain Types of Land
The BC Builders Lien Act applies only to land located
in British Columbia. If you are working on a project located
outside British Columbia, you cannot file a lien in British
Columbia. Each Province has its own builders lien legislation and
you will have to follow the legislation of the Province where the
land is located. When working on a project outside of British
Columbia, never assume that the same time limits apply and if you
are unfamiliar with that Province's lien legislation, obtain
There are certain types of lands located in British Columbia
which cannot be liened. Federal land and federal undertakings that
have extraprovincial importance, which usually includes federal
government buildings and international airports, cannot be liened.
The BC Builders Lien Act, as a piece of provincial
legislation, cannot regulate federal lands. Aboriginal land, which
is subject to federal jurisdiction, falls into this same category
and cannot be liened.
The BC Builders Lien Act also prevents liens from being
filed against highways (which includes public streets, roads,
trails, bridges, trestles, tunnels, or other "public
ways", and any improvements located on them), forest service
roads, as defined by the BC Forest Act, and ferry
Under the Monetary Limit
A claim of lien cannot be filed seeking security for less than
Missing the Time Limits
If you are outside the deadline to file a claim of lien, you are
out of luck. You must file your claim of lien within 45 days of the
first of either the date of issuance of a Certificate of
Completion, actual completion of the project, abandonment of the
project, termination of the contract, or, when the work is being
done on a strata lot, 45 days from when the strata lot is conveyed
to the purchaser or is first occupied. Each of these
"trigger" dates for filing a lien have been extensively
interpreted by the Courts. If a claim of lien is not filed within
the applicable 45 day deadline, then the right to claim a lien is
When there is some doubt as to when the clock started running on
the 45 day period, it is prudent practice to proceed with filing
the claim of lien and to be prepared to quickly remove it if it is
later shown that the lien was clearly filed out of time.
Further, if the 45 day period has expired, but there are funds
retained in a holdback account, then the contractor should consider
making a Shimco lien claim. A Shimco lien is a separate and
distinct lien against holdback funds, as outlined by the BC Court
of Appeal in Shimco Metal Erectors Ltd. v. Design Steel
Constructors Ltd., 2002 BCSC 238, affirmed 2003 BCCA 193. The right
of a contractor to claim a Shimco lien is not dependent upon a
claim of lien being filed within the applicable time limits.
What To Do When You Cannot Lien
If you cannot file a claim of lien, then there are other options
available to you to assist in securing or enforcing payment. If you
know from the outset of the project that the BC Builders Lien
Act will not apply (for example, the Project is on federally
owned or Aboriginal lands), then ensure that the owner is required
to obtain a labour and materials payment bond or negotiate that the
owner be required to maintain a holdback account which will provide
some measure of security for unpaid accounts.
If you discover at the end of the Project that you have missed
the deadline to file a claim of lien, determine whether there are
holdback funds, and if so, then provide notice to the holder of
those funds that you are asserting a Shimco lien.
Finally, if the unpaid amounts justify the time and expense, you
may commence an action to sue the owner and/or general contractor
for breach of contract, debt, and unjust enrichment. Unlike an
action to enforce a builders lien, which must be brought in Supreme
Court, a debt action may be brought in Small Claims Court if the
amount at issue is less than $25,000 or you are prepared to reduce
the amount of your claim to $25,000. Claims for more than $25,000
must be brought in Supreme Court.
Originally published in Construction Business
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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Russell v. Township of Georgian Bay provides a useful reminder of the fact that while municipal officials sometimes appear to hold all of the cards in disputes with home owners, that is not always the case.
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