CONSTRUCTION LIEN ACT:
The Construction Lien Act provides special rights not available to other business in Ontario.
Generally, in order to sue for unpaid work, one must have a contract with the party whom you are seeking monies (this is called “privity of contract”). Under the Construction Lien Act “privity” of contract” is not required as a trade has the right to place a construction lien against the property for which they provided services and/or materials.
As a general rule, a claimant can register a lien within 45 days of the last date that services or materials were provided. If there is publication of a date of “substantial completion” under the provisions in a construction trade magazine, the period for registering a lien can be even shorter.
Once the lien has been registered on the title to the property, it must be “perfected”. Normally, a lien is perfected by the issuance of a Statement of Claim (commencing legal proceedings) and thereafter registering a Certificate of Action on title.
Lien actions are often tried together and if a project is running into financial difficulties, there may be several liens on the same project. It is important to register your lien against the property because if the property is sold, without registration of the lien, your rights to claim against the land will be lost forever.
If a contractor is expecting an advance of monies from the owner or the owner wishes to sell or mortgage the property, the placing of a lien can often provide a strategic advantage to the lien claimant in order to secure a relatively quick payment of monies. Even if the lien does not secure a quick payment of money, it is the best manner in which to protect the rights of the claimant.
The Construction Lien Act offers contractors special rights to “place a lien” against a property where they have supplied labour or materials. Liens are complicated and legal advice is required to ensure that the strict requirements of the Act are followed, and that the lien is not lost on a technicality. Generally a trade has 45 days from the last date of service (or publication in a trade newspaper, which ever is earlier) to register a lien, and another 45 days to perfect the lien by commencing a lawsuit and registering the Notice of Action on title.
The Act separately provides that all monies received on a project are trust monies only to be properly expended in accordance with those trust obligations. Call Pranzitelli Law Firm today, if you need assistance with a Construction Lien Matter.