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Builders' Liens in BC
In British Columbia, builder liens are crucial for protecting contractors and suppliers against non-payment. These liens must be filed correctly and within specific timelines, making them more complex than other construction agreements.
Understanding the Legal Framework of Builders’ Liens in BC
In BC’s construction sector, few things are more frustrating than completing a project exactly as promised and then not getting paid.
The Builders’ Lien Act provides contractors, subcontractors, suppliers, and workers with a tool to secure payment by placing a claim against the property they improved.
A properly handled builders’ lien can be the difference between a viable business and bankruptcy.
What is the Builders' Lien Act
The Builders’ Lien Act serves as payment insurance in construction, recognizing it as a chain of trust where owners hire general contractors, who hire subcontractors, and so on. When payment stops, everyone downstream suffers.
The Act addresses this by:
- Allowing anyone who provides work or materials to lien the land for the value they added.
- Requiring parties up the chain to set aside a 10% holdback strictly for legitimate lien claimants.
This holdback is statutory trust money, and its misuse can lead to personal liability, even for incorporated companies.
Courts have consistently upheld this interpretation, evident in cases such as Bank of Montreal (2012 BCCA 4) and Shimco Holdings (2023 BCSC 178).
Ultimately, the Act is remedial legislation meant to favor those who perform the work.
Legal Foundation for Securing Payment in Construction
The Builders’ Lien Act is a BC law that allows individuals in construction to register a claim against a property if they don’t receive payment for work or materials supplied. This creates a legal charge against the property title, making it difficult for the owner to ignore an unpaid bill.
The Act covers most construction projects in BC and sets rules for creating and removing liens, as well as mandatory holdbacks during a project. However, you cannot file a builder’s lien on federal government property, highways, or certain public bodies, though they must still follow holdback requirements.
BC is making big changes to construction payment laws. In October 2025, the government introduced Bill 20, the Construction Prompt Payment Act.
This new law will change the timeframe for making payments in construction. It’s the biggest update to BC’s construction payment rules in over 20 years.
Key Concepts: Lien Meaning, Trust Funds, and Compliance
A builder’s lien is a statutory claim for money owed for work done or materials supplied. It arises automatically when you start contributing, but you must register it within 45 days to maintain it.
According to sections 8–10, money paid by an owner to a contractor for an improvement becomes trust funds for all parties involved. Diverting these funds for other purposes, such as paying rent or taxes, is a breach of trust, which can result in criminal and civil penalties.
Compliance is essential. Issuing a Certificate of Completion or reaching substantial performance triggers the 45-day deadline. If you miss it, your lien rights are lost, regardless of the validity of your claim.
Who Can Claim a Builders' Lien
The Act was intentionally designed to cover a broad range of participants, ensuring protection for the workers who perform the actual labour on a project, not just those at the top of the contractual chain.
Eligible Parties: Contractors, Subcontractors, Suppliers, and Workers
In day-to-day practice, the people who actually file liens are:
- General contractors (when owners withhold final payment or extras)
- Subcontractors of every trade, including framers, electricians, plumbers, drywallers, and roofers.
- Material suppliers, like lumber yards, concrete plants, tile stores, and equipment rental companies.
- Workers and small sole-proprietor trades who can’t afford to carry unpaid invoices.
- Architects and engineers, but only for services directly tied to the physical improvement (design-only work usually doesn’t qualify).
Protecting Payment Rights for Work or Materials Provided
The lien is not limited to the 10% holdback. If the holdback is insufficient or already released, a valid lien attaches to the land for the full unpaid amount. In extreme cases, the court may order the sale of the property to satisfy the claim. For subcontractors and suppliers without a direct contract with the owner, this is often their only leverage.
Register the lien on day 44, and the owner faces a significant problem that can only be resolved by payment or a bond. Experienced construction litigators, such as those at Harbourview Law, recommend proactive steps.
The Ten Percent Holdback Requirement
The 10% holdback is the engine that keeps the entire system running. It is mandatory, it is automatic, and it is the money available to pay lien claimants.
Owners Must Withhold Ten Percent From Contractor Payments
Each time an owner makes a progress payment to the head contractor, 10% of that amount must be withheld as a retention or holdback. This holdback accumulates throughout the project’s duration and is released after a 55-day “lien-free” period following substantial completion or project abandonment.
If the owner fails to retain this amount, they become personally liable to any lien claimants for the missing funds, even if the contractor has already been fully paid.
Contractor Holdback Requirements
When a general contractor pays a subcontractor, 10% of that payment must be withheld. This ensures there are funds available to address potential claims at every level.
Many contractors mistakenly believe they only need to worry about the owner’s holdback, which is a costly error. Courts enforce the subcontractor holdback obligation and may rule against contractors who pay the full amount too early.
Ensuring Compliance With the Construction Lien Act
Holdback management requires accurate accounting, progress billing, and contract tracking to ensure timely project completion.
Noncompliance with holdback rules can lead to unexpected claims for both owners and contractors.
How To File and Enforce a Lien
Filing a builder’s lien in British Columbia is straightforward and accessible to everyone. However, if you miss the deadlines, you lose your right permanently. Here’s how the process works.
Step-by-Step Process To Register a Builders’ Lien
If you’re not getting paid, filing a builders’ lien might be your best option.
Here’s the process:
Step 1: Gather Your Information
You need the complete legal description of the property, the Parcel Identifier (PID), details about your work, the amount you’re owed, and the name of the person who hired you. Find the PID by searching the property address on BC Assessment’s website.
Step 2: Complete Form 5
Form 5 (Claim of Lien) is the official form. It asks for your name, the property’s legal description and PID, a description of your work, who hired you, and how much you’re owed.
Be accurate. Filing a claim with false information under section 45 of the Builders Lien Act can result in fines up to $2,000 or the amount you over-claimed, whichever is greater.
Step 3: File the Form
You have three options:
- Online: Use the Land Title Office website (6 AM to 11 PM, Monday to Saturday). You need a BC Services Card account. Registration completes within 2 business days.
- By Mail: Mail to LTSA, Suite 500 – 11 Eighth Street, New Westminster, BC V3M 3N7. Sign with blue or black ink only, no correction fluid.
- In-Person: Book an appointment at one of the offices in New Westminster, Victoria, or Kamloops (9 AM to 3 PM, Monday to Friday).
After filing, get a post-registration search to confirm your lien is properly registered.
Serve a copy on the owner (and head contractor, if you are a sub) within a reasonable time. Courts expect this to be done promptly.
After registration, the lien appears on title searches within hours and immediately restricts the owner’s ability to manage the property. Firms like Harbourview Law assist with this process, ensuring that the forms are comprehensive to avoid future challenges.
File Within Forty Five Days of Substantial Completion
The forty-five-day deadline begins when the improvement is substantially complete (typically 95-98% finished) or on the last day you provided labor or materials, whichever is earlier. Weekends and holidays count, and courts have dismissed claims filed on day 46, even if the delay was due to the owner’s actions. The rule is clear.
Filing Options Include Online or Paper Submission
Online filing through the LTSA portal is now used in over 90% of cases. It is instant, provides immediate confirmation, and avoids courier delays. Paper filing is still accepted, but takes longer to process and carries the risk of arriving after 4:30 p.m. on day 45.
Start Court Action Within One Hundred Eighty Days To Enforce
Registering a lien allows for 180 days to file a court action to enforce it. If you miss this deadline, the Registrar of Land Titles will cancel the lien upon the owner’s request.
Most actions are started in BC Supreme Court with a Petition or Notice of Civil Claim, and the majority settle before trial. Once the lien is on the title and a lawsuit is filed, settlement becomes more urgent.
Resolving Claims Through Settlement or Foreclosure
Most lien disputes are resolved through negotiation or payment from holdback funds. When settlement isn’t possible, the court may order:
- Sale of the property
- Payment out of court
- Determination of priorities among multiple lien claimants
- Distribution of holdback funds
Notice of Interest
A Notice of Interest is a proactive tool that property owners can use to protect their land from unexpected or unauthorized lien claims.
Safeguard Ownership Under the Builders’ Lien Act
An owner who files a Notice of Interest at the Land Title Office alerts all parties that:
- The owner is not the one contracting the improvement.
- Any person providing work or materials must look to the tenant or developer for payment.
This is common in situations where:
- A tenant performs improvements to leased premises.
- A developer works on land they do not yet own.
- Multiple parties share responsibility for construction work.
Prevent Unexpected Liens on Property
Let’s consider a real-world example:
A landlord leases space to a restaurant tenant who hires a contractor for renovations. If the tenant stops paying, the contractor may file a lien.
Without a Notice of Interest, the lien attaches to the landlord’s building, even if the landlord did not hire the contractor. If a Notice of Interest is registered before the lease is signed, the lien only attaches to the tenant’s leasehold interest, which is typically of little value.
Commercial landlords and developers register Notices of Interest as standard practice, while residential property owners rarely do so, leaving them vulnerable to subcontractor liens even after paying their general contractor in full.
Common Disputes
Builders’ lien disputes are common in BC, often stemming from payment disagreements, contract misunderstandings, or documentation errors. Here are the most common disputes in Builders’ Lien Act litigation.
Breach of Contract, Poor Workmanship, and Non-Payment
The most frequent causes of lien disputes include:
- Non-payment for services or materials
- Delays impacting contract performance
- Poor or incomplete workmanship
- Scope of work disagreements
- Backcharges that reduce payment
- Abandoned or terminated projects
Defending Against Invalid Liens and Trust Fund Issues
Owners and head contractors defend lien claims in three main ways:
- Prove the lien was filed late
- Show the claimant is not in the chain of contracts (rare)
- Argue set-off for defective work or back-charges
Defending a trust fund claim is rarely straightforward. Improper distribution of project funds can lead to liability, including personal liability for directors, which often surprises smaller contractors who rely on incorporation for protection.
Harbourview Law: BC Construction Litigation Experts
When builders’ lien issues arise, the stakes are high. Lien claims can block property sales and financing, leading to costly litigation. Experienced legal guidance is essential for navigating the Builders’ Lien Act.
Protect Your Rights Under the Builders’ Lien Act
If you have an unpaid invoice, a lien on your title search, or need your contracts reviewed before your next project, contact us today. A consultation can save you significant amounts of money and stress.
Builders’ Liens
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