Canada: Time Is Tickin' — Limitation Periods And Your Lien

You've registered a lien; now what? You have to preserve (and prove) your lien. The Builders' Lien Act (the "BLA") is rife with limitation periods, many of which, if missed, could jeopardize your lien. However, recent case law suggests that in certain circumstances, failure to meet one or more of these limitations might not be fatal. As a current or future lien claimant, it's important that you understand how to navigate the BLA and the case law, and Field Law can help you.

Do I have to commence an action?

Under s.43 of the BLA, a lien ceases to exist unless an action is commenced and the lien claimant registers a certificate of lis pendens (CLP) in the land titles office within 180 days.

Exceptions to the Rule

In the recent decision of Homes by Element Construction Ltd (Re), 2017 ABQB 442, the Court considered whether a builders' lien should be declared invalid because the lienholder failed to register a CLP within 180 days. The lienholder, Lupien Woodwork Ltd. ("Lupien"), registered its lien on June 22, 2015 on property owned by David and Tricia Fiegel (the "Fiegels"). On November 10, 2015 Lupien filed a Statement of Claim and a CLP but did not register the CLP at Land Titles. The 180 day period expired on December 20, 2016.

Notwithstanding s.43 of the BLA, the Court sided with Lupien and waived the requirement to file the CLP. In making this finding, the Court held that because the Fiegels represented that they did not dispute Lupien's claim and their lawyer advised Lupien it was practically unnecessary for them to file and serve a defence in the action, the cost of registering a CLP and insisting upon a defence would have served no useful purpose and made no sense in the circumstances. The Fiegels were estopped from putting the validity of the lien in issue and thus lack of a CLP at land titles was not fatal to Lupien's lien.

How does this decision affect you?

As a lienholder it is crucial to ensure you meet the requirements of the BLA as non-compliance could very likely mean your lien will have expired. While the Court may step in to save a lien in certain specific circumstances, you should not rely on this as a general practice when embarking down the path of filing and proving a lien.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.