Think Leaving Equipment On Site Extends Your Lien Period? Think Again.

October 30, 2019

Think Leaving Equipment On Site Extends Your Lien Period? Think Again.

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, lawyer, with Field Law.

Anthony Burden

Anthony Burden

Anthony is a litigation Associate at Field Law, practicing in the areas of construction, general litigation and insurance. He has experience defending and prosecuting builders' lien claims, deficiency claims, contract and payment disputes and other general litigation disputes.

Leave a Reply

Your email address will not be published. Required fields are marked *