The Builder’s Lien Act in British Columbia: A Complete Guide for Property Owners, Contractors, and Tradespeople.

Construction projects involve multiple layers of contractors, subcontractors, suppliers, and labourers—each with financial interests in a successful outcome. When payment disputes arise, the Builder’s Lien Act, SBC 1997, c. 45 (“the Act”), offers protection and enforcement tools to help ensure those who contribute to the improvement of land get paid.

1. What is a Builder’s Lien?

A builder’s lien is a legal claim registered against the title of land by a person who has supplied work, services, or materials to improve that land and has not been paid.

It creates a charge against the land, which can:

1. Prevent the owner from selling or refinancing the property;
2. Secure the amount owed; and
3. Prompt quicker resolution of payment disputes.

 

2. Who can file a Lien?

If you’re working in construction in British Columbia and haven’t been paid for your work or materials, you may have the right to file a builder’s lien.

The Builders Lien Act allows the following individuals and businesses to file a lien:

1. Contractors: Anyone who has direct contract with the owner of the property to supply labour, materials, or both for a construction project.
2. Subcontractors:Anyone who has a contract with a contractor (or another subcontractor) and supplies work or materials used in the improvement of the land.
3. Workers (Labourers):Individual workers who perform physical labour on a project can file a lien if they haven’t been paid for their services.
4. Material Suppliers:Suppliers who provide materials that are incorporated into the construction—such as drywall, piping, or electrical components—may file a lien if unpaid.
5. Design Professionals:Architects, engineers, and other consultants who provide design or inspection services related to the construction can also file liens, provided their work improves the land.

 

3. Time Limits: Filing and Enforcement Deadlines

Filing the Lien: 45 Days

You must file your lien within 45 days of the earliest of:

1. The issuance of a certificate of completion for your contract;
2. Substantial completion, abandonment, or termination of your contract; or
3. The completion, abandonment, or termination of the overall improvement.

This 45-day clock does not restart with every unpaid invoice. Missing this deadline means losing your lien rights.

Enforcing the Lien: 1 Year

If you file a lien, you have 1 year from the date of filing to start a Supreme Court of BC action to enforce it.

However, if the owner serves a Notice to Commence an Action, you must commence legal action within 21 days of receiving the notice, or your lien is extinguished.

4. Holdbacks: The Owner’s Protection Obligation

 The Builder’s Lien Act also imposes obligations on owners and payers to retain a 10% holdback from each payment made under the construction contract.

This holdback helps ensure that funds are available to pay lien claimants who may not have direct contracts with the owner.

How long must the holdback be kept? 55 days. 

The holdback must be retained for 55 days after:

1. Issuance of a certificate of completion for the contract; or
2. Completion, abandonment, or termination of the work (if no certificate is issued).

 

5. Lien Amount Limits

You can only lien for the value of unpaid work or materials actually provided. You cannot lien for:

1. Anticipated profits.
2. Work not performed.
3. Non-construction related debts.
4. Punitive or interest damages.

6. How do you remove a Builder’s Lien?
A builder’s lien can create serious issues for property owners, developers, and even lenders. It can delay financing, halt construction, or impact the sale of a property.

1. Pay the Claimed Amount:If the lien claim is valid and the amount is undisputed, the simplest solution is to pay the lien claimant. Once paid, the lien holder must file a discharge of the lien with the Land Title Office.
2. Post Security:If you dispute the lien or want to keep the project moving without waiting for resolution, you can remove the lien by posting security with the court.
3. Wait for the Lien to Expire: A lien is not valid forever. If the lien claimant does not commence a court action and file a Certificate of Pending Litigation (CPL) within the proper timeline, the lien automatically expires; however, an application to the Land Title Office must be filed in order for the Lien to be removed off title of the property.
4. Apply to Court for Cancellation: If the lien is clearly invalid—for example, filed after the 45-day deadline, by an ineligible party, or not tied to actual work—you can apply to Supreme Court to have the lien declared invalid and cancelled.
5. Negotiate a Settlement: In some cases, especially where there’s a dispute about the amount owed, a negotiated settlement can lead to a mutual release and voluntary discharge of the lien. This avoids court and can save time and legal fees.

Why Legal Advice Matters

The Builder’s Lien Act is a valuable tool, but it’s technical and unforgiving when it comes to deadlines and procedures. Whether you’re a contractor trying to secure payment or a property owner facing a lien on title, getting legal advice early can prevent mistakes and resolve disputes more effectively.

If you need assistance with lien filing, enforcement, cancellation, or defending against lien claims, Ahuja Litigation Mediation Arbitration is here to help.