Holdback (Builders Lien Act)

Under the Builders Lien Act, RSBC 1996, c. 45, the owner of an improvement (construction project) must retain 10% (as of 2026-07-27 — verify current) of the value of work or materials as each payment becomes due. This holdback protects subcontractors, workers, and suppliers who may not be paid by the general contractor. Verify the current percentage and your specific obligations with a BC lawyer or notary before making payments on a construction contract.

Under the Builders Lien Act, RSBC 1996, c. 45, the holdback must generally be retained for a minimum of 55 days (as of 2026-07-27 — verify current) following the filing of a certificate of completion or other triggering event specified in the Act. This period allows subcontractors and suppliers to register a lien if they remain unpaid. Verify the exact holdback release timelines and triggering events with a BC lawyer or notary, as they depend on the project type and filing requirements.

The Builders Lien Act, RSBC 1996, c. 45, imposes the holdback obligation on the "owner" of the improvement, meaning the person for whom the work is being done (typically the property owner or developer). If the owner fails to retain the required holdback and a lien is filed, the owner may be personally liable to pay the lien claimant up to the amount that should have been held back. Verify your role and obligations with a BC lawyer or notary before entering into or paying under a construction contract.

Yes. The Builders Lien Act, RSBC 1996, c. 45, applies to any "improvement" to land, which includes new construction, major renovations, and substantial alterations on residential, commercial, and other property types. Buyers of newly built homes or owners undertaking renovations should be aware that subcontractors and suppliers may have lien rights if the builder or contractor fails to pay them, even if the owner has paid the contractor in full (but failed to retain the statutory holdback). Verify the application of the holdback rules to your specific project with a BC lawyer or notary.

If an owner releases the holdback before the expiry of the mandatory holdback period under the Builders Lien Act, RSBC 1996, c. 45, and a lien is subsequently filed by an unpaid subcontractor or supplier, the owner may be liable to pay that lien claim up to the amount of the holdback that should have been retained. This can result in the owner paying twice—once to the contractor and again to satisfy the lien. Always verify holdback release procedures and timelines with a BC lawyer or notary before releasing funds.

Yes. Under the Builders Lien Act, RSBC 1996, c. 45, subcontractors, workers, and material suppliers have the statutory right to register a lien against the property (the "improvement") if they are not paid, even if the owner has paid the general contractor in full. The holdback mechanism exists precisely to protect against this risk: by retaining 10% (as of 2026-07-27 — verify current) and observing the statutory holdback period, the owner creates a fund from which valid lien claims can be satisfied. Verify your lien exposure and holdback compliance with a BC lawyer or notary.

The holdback period under the Builders Lien Act, RSBC 1996, c. 45, generally begins on the date a Certificate of Completion is issued or filed, or on the date of substantial completion if no certificate is filed, depending on the circumstances described in the Act. The rules can be complex and vary by project type (e.g., phased projects, strata developments). Verify the triggering event and the calculation of the holdback period for your specific construction contract with a BC lawyer or notary.

The Builders Lien Act, RSBC 1996, c. 45, does not generally exempt small projects or owner-occupied residential properties from the holdback requirement; the Act applies broadly to any "improvement" to land. However, practical enforcement and risk may vary depending on contract size, payment structures, and whether subcontractors are involved. Verify whether any exception applies to your specific project with a BC lawyer or notary before waiving or modifying holdback obligations in your contract.

Yes. The Builders Lien Act, RSBC 1996, c. 45, permits alternative security arrangements, such as posting a bond or irrevocable letter of credit in lieu of the cash holdback, subject to compliance with the requirements set out in the Act. These instruments must meet specific criteria to be valid substitutes for the statutory holdback. Verify the form, amount, and conditions of any alternative security with a BC lawyer or notary before relying on it to satisfy your holdback obligations.

If a builders lien is registered against your property under the Builders Lien Act, RSBC 1996, c. 45, do not release the holdback without legal advice. The lien claimant has specific time limits to perfect the lien (typically by commencing a court action), and there are procedures to challenge, settle, or discharge the lien. Consult a BC lawyer immediately to understand your rights, the validity of the lien, and the proper steps to protect your interest in the property and the holdback funds.