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In general, an individual or a corporation can register a claim for a lien for the value of the services, labour and materials that are supplied to the project or improvement.
An equipment supplier is also entitled to register a claim for a lien for the value of the rental equipment or, in some cases, the rental equipment and the operator.
Having an improvement is an important element. That term is defined in the Construction Lien Act and it is essentially a construction project.
As a result of a recent court of appeal decision, one is now able to assert a claim for lien for the value of a mechanical installation on land or within a building.
We must caution that unpaid accounts for repair, maintenance, landscaping and snow clearing, are not subject to a lien and can not be registered by way of a claim for lien against an owners title.
If, however, you are dealing with a public road or highway, one does not register a claim for a lien against the owners title, rather one must give or deliver a copy of a statement of claim to the owner or clerk of the municipality.
What time frame one must preserve or register a claim for lien?
The Construction Lien Act sets out a number of time frames within which the claim for lien must be registered or preserved. What’s important however, is that it must be done within 45 days. the start date may vary.
On larger projects where you have valuation of the progress and substantial performance of the work, the claim for lien must be registered within 45 days of the publication of the certificate of substantial performance (CSP). The CSP is published in the daily commercial news, and the 45 days starts running from the date of publication.
More generally, the last day of work on a project is the start date for the 45 day period. It is important to make the observation that the 45 days does not start date from one’s invoice for the work performed on a project or improvement.
With respect to a public street or highway, registration is not required however the 45 days is still critical. One must then give or deliver a statement of claim to the owner or clerk of the municipality within the 45 day period.
What is my recourse if I register a claim for lien and I am not paid by the owner or the contractor?
Where the lien remains unpaid, the Construction Lien Act requires a second step; the perfection of a claim for lien. This entails issuing a statement from the court from which the project lands are situation. The court issues a certificate of action which is then registered against the title of the owners land.
That step must be done within 90 days of the last day of work, or in the case of publication of a certificate of substantial performance, within 90 days of that publication date.
After commencement of the action and completion of the pleadings, the lawyers for the parties often obtain a court order for a settlement meeting in the lien action. At that meeting, the lawyers for the parties will often agree on the exchange of the affidavit of documents or productions and also the examinations for discovery if necessary.
There are other time requirements in the Construction Lien Acts so one must therefore pursue the construction lien action with some dispatch. Within the second anniversary date of the start of the action, one must obtain a trial date or have the action set down for trial.
In a situation where after registration of the claim for lien, the owner or contractor pays money in to court, and pays in the amount of the lien and 20% for costs, the certificate of action is not required. Nonetheless, one must still start the action to perfect the lien.
On larger projects there are quite lengthy contracts that take the form of the Canadian Construction Association (CCA) Contracts or the Standard Form Contracts that are provided by the Canadian Construction Documents Committee (CCDC). In those contracts, there is a dispute resolution mechanism or continuum.
The parties initially are required to enter into amicable negotiations in an effort to settle their dispute amongst themselves. If amicable negotiations does not result in a settlement between the parties, those standard form CCA or CCDC contracts, stipulate specific time limits for mediation and arbitration.
The first step after amicable negotiations is mediation. If that does not result in a settlement, the parties are required or mandated to proceed with arbitration. Arbitration generally results in an arbitration award and the award can then be enforced in court. It is important to note that if you proceed down the dispute resolution process under the standard form contract you must still to preserve it by registration and start the lien action within the 90 day time frame. That action is then stayed by the court to allow for remediation and arbitration process to unfold. If there is a mediated settlement or an arbitration award, those can then be enforced in the action once the stay is lifted.