What is a Construction Lien?
Under the Construction Act a person who supplies services or materials to an improvement for an owner, contractor or subcontractor, has a lien for the price of the services or materials over the interest of the owner on the premises. In this respect, a lien functions as a security interest, securing payment of the individual providing services or materials.
A lien arises and takes effect as soon as a person first supplies services or materials to the improvement. It is also important to note that a lien does not attach to the premises where the Crown (defined broadly under the Construction Act) is the owner of the premises.
Preservation and Perfection of Liens
Construction liens are typically (but not always) registered on title and recorded in the Land Registry Office. This means that the registered lien will be publically accessible to anyone seeking information about that property.
However, not every construction lien can be registered on title ( i.e. when the land subject to the improvement is owned by the Crown) In such cases, a copy of the lien is given to the owner of the land.
In order to perfect a lien, the claimant must commence an action in the Superior Court of Justice. Where the lien attaches to the premises, a lien claimant must also register a certificate of action on the title.
There are strict deadlines for the preservation and perfection of liens.
If you require assistance, pertaining to construction law matters, involving liens, holdbacks and contractual disputes, please contact the construction lawyers at Devry Smith Frank LLP to discuss your rights and options.
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.