Builders' Liens & Litigation
Builders' Lien claims result when someone is unpaid or claims they were unpaid after supplying work, services or materials for the improvement of a property. The most common type of claim is for work by a trade or delivery of building / construction material to a property. It applies to residential properties as well as commercial properties regardless of whether it is new construction, repair, renovation or otherwise. However, it can apply to some other types of services as well, such as architectural services.
40 Days to Provide Notice of Claim of Lien or Register Lien
The Builders' Lien Act of Saskatchewan, in general, allows a claimant to serve notice of a lien or register a lien against land when they are unpaid. There are time limits to do so. Unlike some provinces such as Alberta, there is no absolute prohibition against filing a lien after the typical 40 day period (in Saskatchewan) has expired, but it may or may not do any good, depending on whether contract and holdback money has already been properly paid out before the late lien was served or registered. This is far too complex a topic to discuss in any detail or with any precision in a website article. A lawyer who understands this legislation in great detail, as opposed to one who only occasionally deals with it, will know that the 40 day period is often calculated informally and incorrectly.
A claimant is not allowed to register a lien at the land registry against Crown property. Instead, notice has to be served on them. The definition of Crown includes various public bodies including land in the name of the province, a city and many public bodies.
The Builders' Lien Act requires an owner or person paying under a contract (such as a general contractor) to hold back 10% of the contract price for 40 days after completion or substantial completion of the applicable contract, and to only release it then if there are no lien claims. If money is paid out too soon, the party responsible for payment might be liable to pay it again.
Removing A Lien
Once a lien has been registered or served, it can affect an owner's ability to get additional advances from their mortgage lender and it can affect the sale of a property. It can be paid voluntarily if the money is owing in exchange for a discharge. If it is disputed, you can hire a lawyer to try to lapse it at land titles. The land titles office will send a notice giving the lien claimant 30 days to start a court action and register it on the title. If that happens, and very often it does, then the lien will stay on the title. At this point or sooner, you'll need a lawyer experienced in builders' liens to help. The Builders' Lien Act also allows an owner or general contractor to apply to court to pay disputed money into court in exchange for removing the lien from the land. The amount to be paid is governed by the legislation and can also be determined by the court. It may involve additional money as security for costs ... but not in all cases. Litigation is time consuming and costly for both sides. The unsuccessful party may be ordered to pay "costs", but with rare exception, that is only a small contribution to the real costs incurred by each side.
Liability for Untrue or Exaggerated Claims
If someone makes a lien claim that is false or exaggerated, the court can grant judgment against them for all losses and harm caused by their wrongful acts. Therefore it should never be considered a negotiating tactic, for example, to make a lien claim that is not true.
The public often assumes that every lawyer is well versed in all areas of the law. Of course that is not possible. I don't practice criminal law, family law, personal injury law or many other areas or the law because it is not possible to be highly competent at everything. However, I do regularly deal with builders' lien issues and can help if you have a problem in that area.
Notice: The information on this website is general in
nature only. It relates to Saskatchewan, Canada and may not be
applicable in your jurisdiction. It does not constitute legal
advice to you and no solicitor client relationship will be established.
You should seek specific legal advice regarding your circumstances
from a lawyer entitled to practise law in your jurisdiction.
www.rickcarlson.com | Mon, 22 Oct 2018 15:31:15 CDT1