Performing work as a contractor or subcontractor brings with it the risk of not being paid by the people who own the property where the work is being performed. As a result of this, contractors and subcontractors are provided certain rights should they run into the issue of nonpayment for work. Builders’ liens offer protection in the form of securing a debt claim against land held by the debtor. However, there are conditions that must be met in order for a builders’ lien to be successful, including a 45-day deadline in which to register the lien after the work has been completed. Of course, as we see in many situations we discuss, the nuances of these requirements are often challenged in terms of how they are to be interpreted. In a recent case before the Court of Queen’s Bench of Alberta, we saw a company try to extend this 45-day window by leaving their equipment on the worksite beyond the date the work was actually completed. Keep reading to see if they were successful in this attempt.
Work goes unpaid for
The plaintiffs were builders and developers, while the defendant owns land on which the plaintiff was building. The parties were working together in the building of a number of properties, and the plaintiff claimed work amounting to over $100,000 was not paid for.
A lien against one of the properties, referred to as the Alberta Beach Home, was registered on November 19, 2010. The defendant claimed the lien was not registered in time, claiming work was completed in August of that year, with more than 45 days having had passed since then. However, the plaintiff stated that there had been work performed on the site on October 9, 2010. The plaintiff also claimed that it had left equipment on the site until 2013 in anticipation of completing work related to warranties.
When did the clock start ticking?
The court found that there was no evidence that any work was done on the side after August 2010, despite the plaintiff stating in its Statement of Lien that some work had occurred on October 9, 2010. The court wrote, “I do not accept Mr. McPeak’s evidence that materials left on site meant that the work was not done. He filled out the lien document; he chose the date; he made the representation. The lien was filed out of time. I accept the evidence that the time period referenced in section 41(1) of the began in August, 2010. Even assuming a date of August 31, 2010, the lien was filed out of time.”
This decision serves as a good reminder that even if a contractor or subcontractor leaves equipment on a site, it must be able to demonstrate that work had been performed on the site within 45 days of a builders’ lien being filed.
At HMC Lawyers, our Construction Team offers exceptional legal advice on builders’ liens and related disputes to various segments of the construction industry. We provide personalized service to each of our clients to help them make well-informed decisions about their business while protecting their legal rights. To speak with one of our lawyers, call 1-800-480-3534 or contact us online.