Can Leaving Equipment on Site Extend the Period for Filing a Builders’ Lien?

Builders’ liens provide protection for multiple stakeholders in construction projects by securing a debt claim against land held by the debtor. However, some conditions must be met for a builders’ lien to be successful, including a 45-day deadline to register the lien after the work has been completed.

Of course, the nuances and interpretation of these requirements in each particular case can be challenging. An example of this was in the case of Woodbridge Homes Inc. v. Andrews, a 2019 decision of the Court of Queen’s Bench of Alberta in which a company argued that the 45-day lien window was extended when they left their equipment on-site after the work was completed.

Parties disagreed on timing of 45-day lien period, equipment left on-site for 3 years

The plaintiff in Woodbridge Homes were builders and developers that were constructing a number of properties on land owned by the defendant. The plaintiff claimed that over $100,000 in work had not been paid.

A lien against one of the properties, referred to as the Alberta Beach Home, was registered on November 19, 2010. The defendant claimed the lien was not registered in time as the work had been completed more than 45 days prior, in August of that year. The plaintiff, however, stated that work had been performed on-site until October 9, 2010. It also argued that equipment was present on the site until 2013 in anticipation of completing work related to warranties.

Presence of equipment and materials on-site does not mean work is ongoing

Despite the plaintiff’s claims in its Statement of Lien, the Court found no evidence that any work was done on the construction site after August 2010. The Court also did not accept the argument that the work at issue was not completed simply because equipment and materials were left on-site. In the words of Justice Mandziuk:

“I do not accept [the plaintiff]’s evidence that materials left on site meant that the work was not done. He filled out the lien document; he chose the date; he made the representation. The lien was filed out of time.”

The Court held that even if the work had been completed at the end of August 2020, the lien was still filed outside of the 45-day time period.

Understanding construction law critical for securing right to payment

The Woodbridge Homes decision serves as a good reminder that even if a contractor or subcontractor leaves equipment on a site, it must be able to demonstrate that work was actually performed within the lien timelines.

Alberta’s builders’ lien laws will be changing substantially on August 29, 2022. The Builders’ Lien Act will become the Prompt Payment and Construction Lien Act, which provides a new framework for prompt payment of contractors and subcontractors. In addition to changes to holdback requirements and the adjudication of payment disputes, the new legislation increases the deadline for filing a lien from 45 to 60 days from the last day services or materials were supplied (90 days in the case of concrete work or materials).

Consulting with a qualified construction lawyer helps secure your financial and business interests and ensures you remain in compliance with the strict requirements of Alberta’s changing construction laws.

Contact HMC Lawyers in Calgary for Experienced Construction Law Advice

At HMC Lawyers, our talented lawyers understand the technical nature of construction disputes and the unique needs of businesses in the industry. We provide comprehensive advice and reliable legal solutions on issues relating to builders’ liens, delay claims, and all other matters arising from a construction project. To schedule a consultation, call us at 1-800-480-3534 or reach out online.