What is the Builders Lien Act
The Builders Lien Act, SBC 1997, c 45 (the “Act”) is provincial legislation that sets out a number of rights and responsibilities for construction industry participants in British Columbia. It is mandatory legislation which parties cannot avoid by agreement – subsection 42(2) of the Act voids any agreements that the Act does not apply to.
Who does the Act apply to?
Property owners, lenders, contractors, subcontractors, architects, engineers, material suppliers, and workers are all expressly referred to in the Act.
What does the Act cover?
The Act covers a range of concepts, including:
- Various definitions, such as what constitutes a “completed” improvement;
- Circumstances where work on an improvement may be deemed to have been authorised;
- Who is entitled to a lien under the Act, and for what type of work;
- Processes for filing and enforcing a claim of lien;
- The requirement for a statutory holdback on payments to contractors and subcontractors;
- Processes and restrictions for the handling of the statutory holdback;
- The establishment of trust funds regarding funds paid to contractors and subcontractors;
- Consequences for improperly filed claims of lien or misused trust funds; and
- Time limitations respecting liens, holdbacks, trust funds and more.
Why learn about the Act
If you are involved in construction in BC, you should know your rights and responsibilities under the Act. The Act has several strict timelines that cannot be extended (even by agreement between the parties).
For those looking to get paid for their work (and/or materials), the Act can be a powerful tool to securing same. A builders lien is created by statute without a comparable alternative at common law. This means that if the Act is not adhered to, you may lose rights and prejudice your rights..
For those positioned “up the chain” of contracts, the Act imposes several obligations that can carry severe consequences if not followed. For example, consequences for non-compliance with the Act can include (a) the need to effectively pay accounts twice, (b) personal liability, (c) fines and (d) (in extreme circumstances) imprisonment.
Claims for builders liens can still be full of nuance and unforgiving pitfalls. Consult a lawyer if you have questions or concerns about making a claim of lien.
