Builders Lien Act BC, & Time Limits to File Claims
As part of our “claim time limitations” series we have covered many specific scenarios from general tort claims and employment dispute / human rights claims, as well as divorce/separation claims and claims against municipalities too. In this post, we want to touch on time limitations when it comes to Builders Liens. Please see below for more details.
The Builders Lien Act of B.C., Amendments, Forms, & Resources
If you are a builder (i.e. contractor, subcontractor, worker), you could potentially use a builder’s lien if you are having difficulty getting paid. By filing a builder’s lien, you are registering a legal interest against the property you have done work on. You are showing you have a financial interest in the project, for monies owed for the work you have done.
There are a number of legal considerations when you want to use the builders lien process set out by BC’s 1997 Builders Lien Act (Chapter 45) (the “Act“). And when you include 1998’s Builder’s Lien Act Amendment Bill 45, as well as the Builders Lien Forms Regulation and other info, it can be a lot to consider. That is why we recommend you work with a BC builders lien law professional. Contact one of our lawyers today for a consultation. There are time limitations to file builder lien claims. See below for more on these time limits, and contact us now!
Classes of Builder Lien Claimants
There are 3 main classes of lien claimants as defined in s. 1 of the Act.
A person engaged by an owner to (a) perform or provide work, or (b) supply material, in relation to an improvement. This does NOT include a worker.
A person engaged by a contractor to (a) perform or provide work, or (b) supply material, in relation to an improvement. This does NOT include a worker, or a person engaged by an architect, an engineer, or a material supplier.
*The sub-classes architects, engineers, and material suppliers are either contractors or subcontractors under the Act.
An individual engaged by an owner, contractor, or subcontractor for wages in any kind of work, whether engaged under a contract of service or not. This does NOT include an architect or engineer or person engaged by an architect or engineer.
The Definition of “Improvement” in The Act
Section 1 of the Act defines an “Improvement” as anything made, constructed, erected, built, altered, repaired, or added to, in, or under land, and attached to it or intended to become a part of it, and also includes any clearing, excavating, digging, drilling, tunnelling, filing, grading, or ditching, of in, or under land.
Completing the Claim of Lien Form, and Filing The Lien
The Act requires that a claim of lien be made by filing the prescribed form (Form 5) in the appropriate Land Title Office.
Filing the Builders Lien
The claim of lien form (Form 5) should be filed electronically in the Land Title Office once completed. It is advised to obtain a title search just before pre-registration in order to ensure the legal description has not changed since the claim of lien was prepared. After filing, it is advised to obtain a post-registration search to confirm that the claim of lien is shown as pending against the title.
The Time Limitations for Filing Builders Lien Claims in B.C.
In general, builder lien claim filing limitations are within 45 days. However, depending on whether a certificate of completion has been issued or not, the 45 day time limit starts at different times. Below is what the specific clause in the Builders Lien Act states exactly:
Time for filing claim of lien
20 (1) If a certificate of completion has been issued with respect to a contract or subcontract, the claims of lien of
(a) the contractor or subcontractor, and
(b) any persons engaged by or under the contractor or subcontractor
may be filed no later than 45 days after the date on which the certificate of completion was issued.
(2) A claim of lien that is not governed by subsection (1) may be filed no later than 45 days after
(a) the head contract has been completed, terminated or abandoned, if the owner engaged a head contractor, or
(b) the improvement has been completed or abandoned, if paragraph (a) does not apply.
(3) Subsection (1) does not operate to extend or renew the time for filing of a claim of lien if
(a) that time would otherwise be determined with reference to the time an earlier certificate of completion was issued, or
(b) time had started to run under subsection (2).
(4) On the filing of a claim of lien under this Act, the registrar or gold commissioner has no duty to inquire as to whether or not the lien claimant has complied with the time limit for filing the claim of lien.
Limitation Period from Date of Filing the Lien Claim
Keep in mind, once you file a lien there are further time limits you need to consider!
Generally, you have one year from the date of filing your lien to both commence a civil action, and file a certification of pending litigation (CPL), or the lien is extinguished. However, the owner can speed this time limit up considerably if they file a Notice to Commence an Action, in which case you will only have 21 days to both commence an action and file a CPL!
It is important to file all the necessary documents properly and on time, that is why we advise working closely with a legal professional. Contact us today for a free consultation now!
Certificate of Completion
This specific document (Form 3) states that work under a particular contract or subcontract has been completed, and is issued by the payment certifier. This is someone identified in the contract or subcontract as being responsible for payment certification. If no payment certifier is identified, this will become the owner acting alone in respect to amounts due to a contractor, or the owner + contractor acting together in respect to amounts due to a subcontractor.
A project is deemed to be “completed” at different times, depending on whether the claim is dealing with a contract/sub-contract or improvement.
Completed Contract / Sub-Contracts
A head contract or sub-contract is substantially performed if the work to be done under the contract is capable of completion, or at a cost of not more than; (a) 3% of the first $500,000 of the contract price, (b) 2% of the next $500,000 of the contract price, and (c) 1% of the balance of the contract price.
An improvement is deemed completed if the improvement or a substantial part of it is ready for use, or being used, for the purpose intended.
A contract or improvement is deemed to be abandoned on the expiry of 30 days during which no work has been done in connection with the contract or improvement (with exceptions for strikes, lockouts, sickness, weather conditions, holidays, a Court order, shortage of material, or similar cause).
The question of whether a contract has been terminated depends on the facts in every case. There must be clear evidence of termination to permit cancellation of a builder’s lien, and to start the 45 day deadline.
Builder Lien Claims: The Bottom Line on Filing & Time Limitations
The bottom line for time limitations when it comes to builders liens claims in B.C. is that there is 45 days to file a claim, and the day that this time limitation starts depends on a few things. It can either be 45 days from when the certificate of completion was issued, or 45 days from when the head contract or improvement has been completed, abandoned, or terminated. For further assistance with filing builder lien claims please feel free to contact us today.