Introduction
The builders’ lien, a creation of Alberta legislation, gives claimants the ability to register a right against a property owner as security for the value of the work or services done that were performed for the benefit of that owner. The Builders’ Lien Act provides unpaid contracts with the ability to foreclose on the land to get paid, with certain requirements. Certain rules and regulations exist in Alberta within these government provisions to protect both the lien claimant as well as the property owner including provisions setting out: minimum work completion requirements as a prerequisite for a lien, the withholding of materials, as well as a trust fund for lien claimants on the money paid by the owner to the contractor.
Who has a right to file a Builders’ Lien?
Because the right to a builders’ lien is found in statute, the party claiming its benefits must be entitled to it within the legislation. The legislation recognizes contractors, subcontractors, material suppliers and wage earners as lien claimants. The lessor of equipment is also a lien claimant. Entities that do not have what is known as “legal personhood” cannot obtain builder’s liens. Legally recognized “persons” who may apply for a builder’s lien include: human beings, corporations, or a legally incorporated society. The following are a few situations where claimants can apply for a builder’s lien: contractors who have completed all or a significant portion of the improvement work to be completed, suppliers who have provided materials to an owner for improvement of their property and whose materials have been actually incorporated in the property, and design professionals such as engineers or architects who have prepared drawings used to complete construction.
Who does not have a right to file a Builders’ Lien?
Entitlement to a lien depends upon the work done, services rendered, or the materials improved upon for an owner, contractor or subcontractor. Certain works completed by a contractor or subcontractor that may be characterized as installations which do not involve structural changes to a building are not considered improvements to the land. Certain abstract developments including development of concepts, logistics, applications in zoning law, or legal or accounting services do not fall within the required definition within the case law. A builders’ lien application will not be successful if the services provided have not been completed for the improvement of the owner’s real property. This requirement carries technical criteria which may invalidate claims and must comply with the statute and common law.
Filing and Proceeding Deadlines
Because the lien exists as a creation of the legislation and not at common law, the timeline requirements are defined within the law and must be adhered to, otherwise the claimant may find that the time to register a lien has lapsed and their ability to register the encumbrance has expired. Generally, a claimant has up to 45 days after the last date where any work or materials were provided to register a lien, and up to 90 days for improvements to an oil or gas well.
It is very important to note that a builders’ lien does not by itself guarantee payment, and there are legal and practical reasons as to why claims may be invalidated. If you have any questions regarding a builders’ lien, or find yourself seeking such an application and require legal assistance, please contact one of Forum Law’s lawyers as soon as possible.
