Construction: Time Limits for Liens Can Be Tricky

Tim Mavko wrote this article for the Fall 2015 issue of Alberta Construction Magazine.

In Jules Verne’s classic novel Around the World in 80 Days, adventurer Phileas Fogg races around the globe. A fortune is at stake. Along the way he battles bad weather, bad intentions and, worst of all, bad information. If he overcomes it all and gets to the right place by the right time, he wins; but if he misses by a minute, all is lost.

Sometimes registering a builders’ lien seems much the same.

A builders’ lien protects someone who has done work or supplied materials on a construction project but hasn’t been paid. It lets an unpaid contractor or supplier claim an interest in the land itself. And this can be powerful: it can freeze money, block sales or even force the owner to forfeit the land. When this happens, people tend to get excited.

To file a lien, one must deliver the right information, to the right government office, by the right time. And sometimes the race to get there is harrowing.

That race starts the first day on the job. The right to a builders’ lien arises as soon as work is done or materi­als are furnished. It’s a mistake to think that one has to wait to the end. Rather, a builders’ lien can be registered legally anytime during the project. However, whether it’s a good strategy at any given point to poke the owner in the eye with a lien is, of course, another matter.

The finish line, however, is sometimes trickier to fig­ure. In most cases, the deadline for registering a build­ers’ lien is 45 days from a specified event. But identifying that event and calculating the 45 days depends on the nature of the claim. (For the actual law, see section 41 of Alberta’s Builders’ Lien Act, http://www.qp.alberta. ca/documents/acts/b07.pdf.)

Consider someone who supplies materials—whether rivets or road crush—but does not do any work. The impor­tant date is when the materials were last furnished. Such a supplier must register within 45 days from the day the last of the materials was furnished or the contract to fur­nish the materials was abandoned. Miss that deadline, even by one day, and the lien will bounce.

Or consider the claim of a company that provides ser­vices, such as renting equipment or inspecting work, without furnishing any materials. Here the trigger is when the services were last performed. The lien must, in most cases, be registered within 45 days of when the performance of the services was completed or the con­tract to provide the services was abandoned.

Sometimes it’s the labourers and employees who don’t get paid. They, too, can register builders’ liens for unpaid wages, but their deadline depends on when they last worked. In most cases, they must file within 45 days from when the work for which their wages are claimed was completed or abandoned.

And then there are contractors and subcontractors who both perform work and supply materials. In most cases, they must register their liens within 45 days from the day their contracts or subcontracts were completed or abandoned. The tricky part is figuring out when that happened—that is, when the contracts or subcontracts were done. Often that is measured by their last day of work on the site. But not always.

One problem arises when the last work was to correct deficiencies or make repairs. For example, a contractor might return months later to fix a door or hang a miss­ing hook, and then try to use that later date to calcu­late the time for slapping a lien on the entire project. Unfortunately, this does not work. Time is not extended by fixing bad work or supplying missing parts.

Conversely, a contractor who left the project months ago, but still has valid work to perform under the con­tract, might mistakenly think that the time for regis­tering a builders’ lien has expired. But if the contract requires, for example, a second coat of sealer in six months or grading next spring, then the clock might not even be ticking.

There is a further exception to all of the foregoing. In most cases, the right to register a builders’ lien expires 45 days from the specified event. But oil and gas wells are different. When the work or materials relate to improve­ments to an oil or gas well, or well site, then the period for registering the builders’ lien extends to 90 days.

But whether 45 or 90 days, sometimes it’s still a race.

Download PDF Article