Think Leaving Equipment On Site Extends Your Lien Period? Think Again.
October 2019 - 2 min read
Builders’ liens provide unpaid contractors and subcontractors on a construction project the ability to secure a debt claim against a piece of land. While courts have acknowledged that the purpose of builders’ liens is to provide this protection, there are criteria that need to be met for a lien to be valid.
One such criterion is that a lien must be registered within a specific timeframe. While section 41 of the Builders’ Lien Act (the “BLA”) provides a 45 day deadline (90 days for an oil or gas well or an oil or gas well site) for lien registration after materials or services are last provided or a contract is abandoned, when this deadline commences can be unclear.
Equipment left on site, without more, will not extend a lien period
Whether leaving equipment on site at a construction project extends a lien period was recently considered by the Alberta Court of Queen's Bench in Woodbridge Homes Inc. v Andrews, 2019 ABQB 585.
Woodbridge was the contractor/agent with respect to the purchase/construction of several different properties for the defendant, Andrews. Woodbridge alleged it was unpaid for part of its work, and registered a builders’ lien against one of the Andrews properties in November 2010. Woodbridge’s lien indicated work was last performed in October 2010.
At trial, Woodbridge argued that there were some potential warranty issues and settling it had to address after October 2010, and it left equipment (a skid steer, two flatbed trailers and a cube van) on site for that purpose. Woodbridge also argued that it had performed some minor work after October 2010.
Woodbridge’s equipment was removed in August 2013 – almost three years after lien registration. Woodbridge argued that this was when it completed its work, and as such, its lien period had not expired in 2010 or any time prior to 2013.
Andrews argued that no amounts were owed, and that in any event, Woodbridge had not performed any work subsequent to August 2010. As a result, the lien registered in November 2010 was out of time based on section 41(1) of the BLA.
The Court held that Woodbridge’s lien was registered out of time. While the Court acknowledged that the “object of the Builder’s Lien Act is to prevent owners of land from benefiting from improvements to their land without paying for them,” the Court recognized that the time period for lien registration is strict.
The Court held that there was no persuasive evidence that any work was completed after August 2010. The lien itself stated that work was last completed in October 2010, which placed doubt on Woodbridge’s assertion that there was
ongoing work left to be completed thereafter. At the time of lien registration, Woodbridge could have indicated on its lien that its work was not yet completed. It did not do so.
The Court also did not accept Woodbridge’s argument, on the evidence presented at trial that materials left on site meant that the work was not completed.
How does this affect you?
If you are a contractor performing work on a project, or you are a contractor or owner faced with a subcontractor lien you believe was registered out of time, and have questions about your lien rights, contact Anthony Burden.