Builder's Lien

Question 1

What is improvement in Builder’s Lien Act

Answer 1

• anything made, erected, built, construction
• on or under land
• and attached to or intended to become part of it

Question 2

What does BLA do?

Answer 2

• Creates Right of Lien against holdback
• Holdback = 10% of every payment in contract
• No liens filed -> Holdback is paid

Question 3

Types of land not subject to BLA?

Answer 3

• Ferry properties
• Federal undertaking
• Highways
• Improvement done by Ministry of Forest

Question 4

Requirement of BLA?

Answer 4

“Owner” requested the improvement

Question 5

How can landlords protect themselves against liens

Answer 5

By filing “notice of interest” on the title to the land

Question 6

Types of owner under BLA?

Answer 6

Exempt
- Federal crown and their agents

Subject:
- Provincial crown and their agents
- School boards
- Municipalities
- Provincial public facility

Question 7

What is the trust?

Answer 7

• BLA imposes a trust on funds received from contractors / sub-constractors for improvement. $ should be used to pay sub-contractors, workers, and material suppliers.
• $ cant be used as other purposes until paying all trust beneficiaries
• Beneficiaries can track improperly used $

Question 8

Engineers - Lien Rights and Trust Obligations

Answer 8

• Engineers can file lien, but not ppl work for engineers.
• no holdback / trust provision applies to engineers payment

Question 9

Time limits under BLA

Answer 9

• can file lien eariler, but not later
• Lien against improvement = 45days
• Lien aginst holdback = before holdback is released
• Release of holdback = 55days

Question 10

5 Triggers of Running of Time

Answer 10

• Certificate of Completion of Contract
• Completion of Head Contract / Improvement
• Termination
• Abandonment

Question 11

3-2-1 formula

Answer 11

• 3% of first $500,000 of contract price
• 2% of second $500,000 of contract price
• 1% of remaining contract price

Question 12

Will there be an extension if the certificate of completion is issued earlier?

Answer 12

• If contract was completed before issuance of certificate of completion
• No extension

Question 13

Completion of Head Contract

Answer 13

“Completed” in relation to contract = “substantially completed/performed”

Question 14

Completion of improvement

Answer 14

• If not considering whether contract complete -> assess whether improvement is complete
• improvement is completed if, substantial part is ready to use or it is being used for the purpose intended

Question 15

Abandonment

Answer 15

Deemed abandonment w/ 30 days of no work

Unless stoppage by lockout, weather, holiday, strike

Question 16

Termination

Answer 16

• Not defined by BLA
• Will be assessed on case by case basis whether terminatino occurred

Question 17

Deadline for initiating lien action

Answer 17

• Within 1yr of filing lien, claimant must start action to enfore lien, and file CPL (Certificate of Pending Litigation) in land title office

Question 18

Discuss the 21 day notice

Answer 18

• Owner can deliver notice to lien claimant to commence action and file CPL within 21 days of service of notice
• Forces claimant to decide in 1yr, whether worth commencing or not
• Enables faster resoultion

Question 19

What is a Lien?

Answer 19

A claim which can be made against title to property in an effort to secure the recovery of money owing the lien claimant

Question 20

What is Contract A

Answer 20

• process contract
• arises between owner and contractor immediately after bid is submitted
• without further formalities

Question 21

What is contract B

Answer 21

• Bidding contract contains another term
• Where bidder will enter into a formal construction contract if the owner awards it to him