Builders Lien

A Builders Lien is a statutory claim registered against a property's title by a contractor, subcontractor, worker, or material supplier who has not been paid for work done or materials supplied to that property. In British Columbia, Builders Liens are governed exclusively by the Builders Lien Act (SBC 1997, c. 45), which sets out who may file a lien, the deadlines for doing so, and the procedures for enforcement. The lien attaches to the owner's interest in the land and can encumber title until it is discharged or resolved. It is a powerful remedy that can affect a property's marketability and financing.

Under the Builders Lien Act, any contractor, subcontractor, worker, or person who has supplied materials or services that are used in the improvement of land in BC may be entitled to file a lien. This includes general contractors, trades such as electricians and plumbers, and suppliers of lumber, fixtures, or other materials incorporated into the improvement. The claimant must have a direct contract or subcontract relationship within the chain of contracts connected to the improvement of the property. Owners themselves generally cannot file a lien against their own property.

The Builders Lien Act imposes strict filing deadlines that vary depending on the claimant's role. Generally, a lien must be filed within 45 days after the earlier of the date a Certificate of Completion is issued or the improvement is completed, abandoned, or the head contract is completed or abandoned. For workers providing only labour, a shorter period applies — consult the current text of the Builders Lien Act for the precise deadline applicable to your circumstances. Missing these deadlines extinguishes the right to file, making timely action critical.

A Builders Lien is registered at the applicable BC Land Title Office by filing a prescribed form — commonly referred to as a Notice of Claim — along with the required filing fee. The claimant must accurately describe the land, the nature of the work or materials supplied, and the amount claimed. Once registered, the lien appears on title and is visible to prospective buyers, lenders, and other parties conducting title searches. Registration preserves the claimant's rights while enforcement proceedings are pursued.

The Builders Lien Act requires that owners and certain other parties retain a statutory holdback — a prescribed percentage of the value of work done or materials supplied — throughout the construction project. This holdback fund is intended to ensure that funds are available to satisfy potential lien claims from subcontractors or suppliers who may not be paid by the head contractor. Owners who release the holdback prematurely may remain personally liable for lien claims up to the holdback amount. Consult the current Builders Lien Act for the exact holdback percentage and release conditions.

A registered Builders Lien encumbers title and will appear on any title search conducted during the conveyancing process, which can prevent or delay a sale from completing. In practice, the parties typically arrange for the lien to be discharged or for the lien amount to be held back from sale proceeds in trust pending resolution, so that clear title can be transferred to the buyer. Under BC conveyancing practice, solicitors ensure that any registered liens are dealt with as a condition of completion. Buyers and their counsel should always conduct a current title search immediately before closing.

Under the Builders Lien Act, a lien may be discharged from title by payment and filing of a release, by court order, or by posting security — such as paying the lien amount into court or providing a lien bond — which substitutes the security for the land itself and allows the title to be cleared. Applying to the BC Supreme Court to vacate a lien is a common remedy when the validity of the claim is disputed or where the project must proceed without encumbrance. The lien claim then continues against the substituted security rather than the land. Legal advice should be obtained when pursuing or responding to a vacation application.

Filing a lien preserves the claim, but the Builders Lien Act also requires that a lien claimant commence a legal action in the BC Supreme Court and file a Certificate of Pending Litigation (CPL) within a prescribed period from the date the lien was filed. If the claimant fails to commence the action and file the CPL within that period, the lien may be extinguished. Consult the current Builders Lien Act for the exact enforcement deadline, as strict compliance is required. These are independent deadlines — satisfying the filing deadline does not automatically satisfy the enforcement deadline.

When improvement work is carried out on a strata lot, a Builders Lien filed under the Builders Lien Act attaches to the individual strata lot owner's interest, not to the entire strata corporation or the common property of all owners. If the strata corporation contracts for work on common property and does not pay, a lien may potentially be filed against the common property, which could affect the interests of all strata lot owners. The Strata Property Act (SBC 1998, c. 43) governs the strata corporation's authority to contract for work, and strata councils should be aware of their holdback and lien exposure obligations when engaging contractors for common property improvements.

Under the Real Estate Services Act (RESA) and the duties established by the BC Financial Services Authority (BCFSA), licensed real estate professionals owe a duty of disclosure to their clients and, in certain respects, to all parties in a transaction. A registered Builders Lien is a material fact that affects title and the marketability of a property, and licensees who are aware of it are expected to disclose it to buyers and ensure it is addressed before or at completion. Licensees should conduct or recommend title searches and advise clients to obtain independent legal advice regarding any registered liens. Failure to disclose known material latent defects or encumbrances on title can expose a licensee to regulatory action by the BCFSA.