Builders Lien 101
Builders' lien law is an essential legal framework that protects the rights of contractors, subcontractors, and other participants in the construction industry. In British Columbia, Canada, builders' lien law is governed by the Builders Lien Act. This act outlines the process that participants in the construction industry must follow when seeking payment for their work or services. In this blog, we will discuss the key aspects of the Builders Lien Act in British Columbia.
What is Builders Lien?
A builders lien is a legal claim against a property that is under construction or has recently been constructed. It is a tool that participants in the construction industry can use to ensure that they receive payment for their work or services. A builder's lien can be placed on a property by contractors, subcontractors, suppliers, and other parties that have provided materials, services, or labour for the construction project.
The Builders Lien Act
The Builders Lien Act in British Columbia provides a legal framework for the creation, registration, and enforcement of builders' liens. The act outlines the rights and obligations of participants in the construction industry, and it sets out the steps that must be followed to place and enforce a builder's lien.
Who can place a builder's lien?
The Builders Lien Act in British Columbia allows several parties to place a builder's lien on a property. These parties include:
- Contractors: A contractor is someone who is responsible for the overall construction of a project. This may include the management of subcontractors and the provision of materials and labour.
- Subcontractors: A subcontractor is someone who is contracted by a contractor to perform a specific part of the construction project.
- Suppliers: A supplier is someone who provides materials or equipment for use in the construction project.
- Labourers: A labourer is someone who provides physical labour on a construction project.
What is the process for placing a builder's lien?
To place a builders lien in British Columbia, the following steps must be followed:
- Serve a written notice of lien: The first step in placing a builder's lien is to serve a written notice of lien to the property owner, the general contractor, and any other party that has an interest in the property. The notice of lien must include the name and address of the person placing the lien, a description of the work or materials provided, the amount owing, and the legal description of the property.
- Register the lien: Once the notice of lien has been served, it must be registered in the land title office. The lien must be registered within 45 days of the completion of the work or the supply of materials.
- Commence an action to enforce the lien: If payment is not received within 45 days of the registration of the lien, the person placing the lien must commence an action to enforce the lien. This involves filing a claim in the Supreme Court of British Columbia.
Enforcement of builders' liens
The Builders Lien Act in British Columbia provides several methods for enforcing a builder's lien. These methods include:
- Sale of the property: If the lien is not discharged, the property may be sold to satisfy the lien. The sale must be conducted through a court-ordered sale.
- Court action: If the property owner disputes the lien, the person placing the lien may commence an action in court to enforce the lien. This may involve seeking a judgment against the property owner.
- Discharge of the lien: The lien may be discharged if the person placing the lien receives payment for the work or materials provided.
Builders' lien law is an essential legal framework that protects the rights of participants in the construction industry. The Builders Lien Act in British Columbia outlines the process for placing and enforcing builders' liens. It is important for contractors, subcontractors, suppliers, and other parties in the construction industry to be aware of their rights.