What is a Builder’s Lien

The Builder’s Lien Act, SBC 1997, C45, allows a builder to file a lien against the title of a property they have worked on and not received payment related to that work. The lien if registered is attached to the title of the property like any other encumbrance. If title for the property is pulled by a bank or potential buyer they will see the lien and be altered to the claim against the property. An individual or company can file a lien against a property if they have worked on or supplied material for that specific property and not been paid for those materials or work on that property. A lien must be filed quickly after work has been completed on the property as waiting too long may deprive an individual their right to file the lien. The most common deadline is 45 days from when the project is substantially completed but this timeline may be triggered earlier if certain events set out in the Builder’s Lien Act occur.

A lien gives an individual security for the work they have completed but does not on its own force the payment for the completed work however after a lien is filed the head contractor or owner may be willing to negotiate the release of the lien to end the dispute. If negotiations are unsuccessful a builder will have to commence a Supreme Court action to enforce their lien against the property. Upon filing an action to enforce the lien the builder can file a Certificate of Pending Litigation (CPL) against the property. Depending on the value of the unpaid work a builder may decide to sue in Small Claims Court instead of Supreme Court. If this path is chosen the action does not enforce lien itself but does allow for a breach of contract claim to be made against the party with whom the builder made the initial contract for work.

If no action is commenced within a year after a lien is filed against a property the lien can be discharged for lack of action. After a lien is filed a homeowner can also serve upon the builder a 21 days’ notice that requires them to file a Supreme Court action to enforce their lien within 21 days. If an action is not commenced the homeowner can then apply to have the lien discharged. If a Supreme Court Action is commenced a homeowner can apply to have the lien and CPL removed from the property in exchanged for depositing security for the lien with the court.