What is a Builders' Lien?
If a contractor, subcontractor, or another party entitled to payment during a construction project doesn't receive payment within the agreed-upon time frame, then one form of recourse such parties have is abuilders' lien. Note: some provinces have prompt payment legislation in place that governs adjudication of payments under strict timelines. This article will not address those provisions but will only speak to builders' lien deadlines.
By registering a builders' lien, the impacted party registers and secures a legal interest in the real property, and this legal interest can be used to recover payment from the property owner, or other parties, against which the lien is filed. One of the consequences of a lien is the property typically cannot be sold or mortgaged until and unless the lien is lifted, or until no other legal interests exist against the property in question. This is one reason to make sure you know your registration deadlines: a builders' lien can provide significant leverage to getting paid when the property owner is trying to sell or otherwise dispose of the property.
Builders' liens are known by various names and titles across the country: for instance, in Ontario, these legal interests are called Construction Liens. In New Brunswick, Nova Scotia, PEI, Newfoundland, Yukon, Northwest Territories, and Nunavut these legal interests are called Mechanics' Liens. In British Columbia, Alberta, Saskatchewan, and Manitoba these legal interests are called Builders' Lien.
What are the registration deadlines?
Not only are the titles different, but the registration deadlines across the various provinces vary. Why is it important to know and understand these registration deadlines? Because in some cases, depending on which province the lien in question is being registered, if you miss the registration deadline you are simply out of luck. That doesn't mean you cannot litigate against the party who owes the money (subject to legislated limitation periods1). You just lose the leverage the builders' lien provides.
The first thing to understand is when a builders' lien arises. The actual definition may differ from province to province, but typically, a builders' lien arises as soon as a person provides their services or material to an improvement. The question then shifts to the deadline: what is the last possible day you can register a builders' lien? While the lien arises as soon as materials or services are provided, there are certain trigger events defined in the legislation which start the ticking of the clock and tell you when your last day to register is. We will refer to this period (from trigger event to deadline date) as the "registration period".
In the below chart, you will see the registration deadline for: Alberta, British Columbia, Manitoba, Ontario, and Saskatchewan. You will also see what legal test triggers the registration period for a builders' liens – you will need to use this legal test to assess when your registration period for the builders' lien started and when it is scheduled to expire.
One final important point to know: if you wrongfully register a builders' lien, either for an amount grossly in excess of the amount that is due, or if you know or ought to reasonably known you do not have a lien, you can be held liable for legal costs, damages, and other costs incurred as a result of the registration, unless you can satisfy a court that the registration or the amount of the lien was calculated in good faith and without negligence.
The takeaway is this: always know your deadlines and when you do or do not have a valid lien. All of this is something we at Procido LLP can help you with. Our lawyers specialize in construction law and have the required understanding of the legislation to help you. Call us anytime.
| Province | The Trigger Event and Registration Period | Deadline (i.e. registration period) |
Where can I go for further information? |
|---|---|---|---|
| Alberta | The registration period begins after either
of the following occurs: a) the day the last of the materials is furnished or the contract to furnish the materials is abandoned (s. 41(1)); b) the day the performance of the services is completed or the contract to provide the services is abandoned (s. 41(2)); c) the day the work for which the wages are claimed is completed or abandoned (s. 41(3));or, d) in cases outside those mentioned above, the day the contract or subcontract is completed or abandoned (s. 41(4)). In addition, a registered lien expires 180 calendar days after the date it is registered on title unless: a) an action has been commenced, and b) the lien claimant registers a Certificate of Pending Litigation (CLP) with the appropriate land office (s. 43). DBD Construction Ltd. v. Tenfold Contracting Ltd., 2015 ABCA 303establishes that the 180-day CLP deadline is a firm deadline; the same ruling applies to the 60-day registration period. Elite Roof Tile Ltd. v. Country Log Homes Inc., 1990 CanLII 5548 (AB KB)establishes a strict interpretation of the Act and states that statutory time periods cannot be extended. |
60 days. Exceptions: a) improvements to an oil and gas well or oil and gas site have a registration period of 90 days b) improvements primarily related to furnishing concrete has a registration period of 90 days If you fail to register the lien within these time limits the lien ceases to exist (s. 42) |
Prompt Payment and Construction Lien Act(linkhere) |
| Manitoba | The registration period starts after
theearlierof one of the following: a) substantial performance or abandonment of the contract (s. 43(1)); b) from the last date of service or last date at which materials were supplied (s. 44(c) and s. 44(d)); c) the date a contract or sub-contract is completed, abandoned, or terminated (s. 44(a) and s. 44(b)). Seniuk v. Motkaluk, 2002 MBQB 232establishes the mentioned registration period is a firm deadline. |
40 days If you fail to register the lien within the time allowed, the lien ceases to exist (s. 42) |
The Builders' Liens Act(linkhere) |
| Saskatchewan | Registration period starts as soon as
substantial completion is issued on a project (s. 49(2)(b)).
Therefore, despite completing work on a project, if substantial
completion has not been issued, the lien deadline may not yet have
started. It is always a good idea to seek legal advice to ensure
you don't miss your deadline. If no certificate of substantial performance is issued, then the registration period starts after the earlier of when the contract is completed or abandoned (s. 49(2)(c)). In addition, the lien for which an action has been commenced expires two years after the date it is registered on the title if it has not been set down for trial. However, the court can extend this time (s. 55). Axcess Capital Partners Inc v Allsteel Builders(2) Limited, 2015 SKCA 33establishes clause 49(5) of the Act explicitly suggests liens can be registered after the deadline, however those registered before the respective deadlines take precedence over those registered after the deadline. The above guidance applies only to general typical contracts, and not to projects stipulated under clause 49(4), such as contracts with a value higher than $25,000,000. |
40 clear days Note: "clear days" refers to the days that exclude the date of notice and the date of expiry. If the lien is not registered within this 40-day time frame, it can still be registered and is valid except as against: a) intervening parties who become entitled to an interest in the land, and b) an owner, mortgagee, contractor, or subcontractor in respect of payments made after the expiration and before registration of the lien (s. 49(5)). |
The Builders' Lien Act(linkhere) |
| Ontario | For contractors' liens where services or
materials have been provided: a) on or before the date certified or declared to be the date of substantial completion, the registration period starts after the earlier of: i. the date on which a certificate or declaration of substantial performance is published in accordance with the Act (s. 31(2)(a)(i); or ii. the date the contract is completed, abandoned, or terminated (s. 31(2(a)(ii); b) where there is no certificate of substantial completion, or where materials or services were provided after the date certified or declared to be the date of substantial completion, the registration period starts after the earlier of one of the following: i. the date a contract is completed (s.31(2)(b)(i); or ii. the date a contract is abandoned or terminated (s. 31(2)(b)(ii). Man-Shield v. Rainy River District School Board, 2012 ONSC 323allows us to infer the lien registration period is firm. Crownwood Construction Ltd. v. Omartech Construction Inc., 2006 CanLII 6689(para. 9) supports this inference. |
60 days If you fail to register the lien within the time allowed, the lien expires (s. 31) |
Construction Act(linkhere) |
| British Columbia | The registration period starts: a) for contractors, subcontractors, and/or those engaged by them, on the issuance of a certificate of completion (s. 20(1));or, b) where no certificate of completion has been issued, after the head contract or improvement has been completed, abandoned, or terminated (s. 20(2)). Thus, the registration period starts after the construction project is substantially completed, abandoned, or ended. Note: if more than one certificate of substantial completion is issued, the registration period starts to run on the issuance of the first certificate (i.e., a subsequent certificate doesn't re-start the clock). A lien that is not filed within the registration period is invalid. This is supported by para 21 inPowerhouse Sheet Rock Ltd. (Inc. No. BC0897180) v AFC Industries Ltd. (Inc. No. BC0817657), 2022 BCSC 1484. |
45 days If you fail to register the lien within the time allowed, the lien is extinguished (s. 22) |
Builders' Lien Act(linkhere) |
Footnote
1 For information about Limitation Periods, see the three-part series posted earlier this year by Kevin Mehi and Troy Baril:
Part 3:Suspending limitation periods through tolling agreements – Procido LLP | Legal + Advisory
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.
