In addition to lien rights and the holdback scheme, the Builders Lien Act establishes trust rules which provide that money received by a project participant for work done is impressed with a trust for the benefit of persons retained by that project participant. Trust funds cannot be used to the personal benefit of the project participant until the amounts owed to trust beneficiaries retained by that project participant have been paid.
Project participants who do not abide by the trust rules may be personally liable for breach of trust and this is sometimes a way for lien claimants who are not fully paid using their lien rights to recover further amounts owed to them.
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