3 key features of the Builders Lien Act

The Builders Lien Act employs three main mechanisms as a means to further its purpose of ensuring contractors and material suppliers are paid while providing owners with appropriate protections: 
 
The purposes of the Builders Lien Act are pursued through a legislative scheme that employs three main mechanisms: the right to a lien, holdback provisions and the creation of a trust... These mechanisms create rights unknown to common law.
(Bank of Montreal v. Peri Formwork Systems Inc., 2012 BCCA 4 at para. 62, citations omitted).
 
These three key aspects to the Builders Lien Act are discussed in more detail on other pages of the website, but a simplified summary is as follows: 
  1. Lien: The Builders Lien Act gives those who improve land (by supplying labour and/or materials) an in rem right against the land improved as a means of securing payment, or at least part payment. Following Shimco Metal Erectors Ltd. v. North Vancouver (District), 2003 BCCA 193 a lien is also available against the holdback fund required to be kept under s. 4 of the Builders Lien Act.
  2. Holdback defence: Where A engages B who engages C1, C2, C3, the Builders Lien Act limits the liability of A (whether A is an owner or contractor) to all of C1, C2, C3 to 10% of the value of work supplied to A by B.
  3. Trust provisions: Where A engages B who engages C1, C2, C3 the Builders Lien Act provides that monies paid by A to B are held by B in trust for C1, C2, C3 until C1, C2, C3 have been paid i.e. B must pay C1, C2 and C3 before B takes profit on the project for itself. C1, C2, C3 need not qualify as lien claimants in order to be trust beneficiaries. 

 

 

 

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