Our construction litigation team at FH&P Lawyers is experienced in a wide range of construction-related matters from design development to tendering and resolution of any disputes. We are trusted advisors of contractors, project managers, engineers and developers and can assist throughout every step of the construction process. When challenging issues arise our team will find a practical and timely solution to keep the project moving.
Having a Builders Lien creates the rights and obligations between contractors and subcontractors but how do you file a lien? Associate Kevin Cheung investigates.
Construction projects generally have several parties involved, there are contractors and subcontractors and they have rights and obligations that are governed by the contracts between them. The Builders Lien Act also creates rights and obligations between them. The Act applies to owners, all contractors and subcontractors. It also applies to architects and engineers and also material suppliers.
The Builders Lien Act imposes or provides some of the parties the right to file a lien; it also creates a right to obtain certain information. It imposes an obligation on owners and contractors to hold back 10 % of amount due under a construction contract and also imposes on contractors and subcontractors to hold the construction funds received in trust for the benefit of other parties that are beneath them in the construction pyramid.
Perhaps the most common question that we receive is how do I go about filing a lien? So first thing we need to determine is, are you entitled to file a lien? If you are a contractor, subcontractor, a supplier of materials, or if you are an architect or engineer then you are amongst the group of people that can file a lien. We would need to determine the legal description of the property which requires a search at the land titles office and the amount owed to you must be over $200. If you are a party that's entitled to file a lien and if you are owed over $200 then you must file your lien within 45 days of a trigger date. This trigger date is usually the date when the certificate of completion is issued but if there is not a certificate of completion then it's when the project or the improvement was completed, abandoned, or terminated. The 45-day deadline is critical and a lot of parties make a mistake by missing this deadline. Once the deadline for filing a lien has passed your rights to file one is extinguished. Now that doesn't necessarily affect the rights you might have under the contract. Generally once a lien is filed the owner of the property will want to get rid of it as soon as possible and they may take steps to see that you get paid. If that's not the case then you have one year from the date you filed the lien to start a lawsuit to enforce the lien. You also have to file a certificate of pending litigation within that one year and this is another area where people make a mistake by missing those deadlines. The one year period might be shortened if the lien holder receives a notice requiring action and if they do receive that then they need to file their lawsuit within 21 days of receiving that. Getting legal advice is encouraged when it comes to builders liens because there are multiple deadlines you need to manage and you are potentially starting a lawsuit so you want to make sure that things are done properly along the way to protect your rights and we can certainly help with that here at FH&P Lawyers.
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