University of Calgary Continuing Education Construction Contract Law and Documents Week 13 Builders Liens (contd) Review of Assignment 4 Questions & Comments

Builders Liens How long does a lien last?  Until dealt with or expires Expires if no action taken within 180 days No 180 day limit if lien removed by paying funds into court

Builders Liens Who forces the issue?  Either side can take action to force the issue  Lienholder – Application to have lien declared valid Money in court used to pay lienholder Lien fund (holdback) used to pay lienholder Sell property and use proceeds to pay  Owner/Other Party Can demand that lienholder prove lien Application to have lien declared invalid Notice to Commence Action

Builders Liens Multiple lienholders Split money pro-rata

Builders Liens Lienable Land  Crown land not lienable  Reservations not lienable  Leased land lienable to the extent of the leasehold estate  Land held by married people even though only one party signed contract (no dower rights)

Builders Liens Subsequent sale  If work done and property sold  Subsequently filed lien for work is invalid

Builders Liens Multiple Contractors on Land  Multiple lien funds  Not intermingled  Developer acting as prime contractor

Builders Liens Prevenient arrangement  Ongoing sales – is it one contract?

Builders Liens Who can file a lien  Lumber company – bulk order to contractor’s yard  Appliance company – ovens to warehouse for storage until used in condo  Trucker hauling material to site  Excavator removes material and delivers to dump site – dump site operator liens job

Builders Liens Other Notes Notice  Must give owner notice in writing if working on leasehold  Owner may give written notice to a contractor that it will pay funds on behalf of contractor  Lienholder may demand the contracts that lead to lien as well as a statement of accounts  Lienholder may demand particulars of mortgage on land

Builders Liens Other Notes Timing  45 days after work performed to register lien (90 for oil and gas) Not deficiencies Must be in scope work (even last item may do)  180 days to start action  5 days for owner to deny responsibility for costs after being notified of work on leasehold  45 days – owner must hold 10% after substantial/final completion except oil & gas  90 days – must hold 10% for oil and gas jobs  3 days – time allowed for person to post substantial completion certificate after issuance  5 days – time for contractor to object to payment being made by owner on its behalf  6 days – time for owner/contractor to produce the contract to lienholder  6 days – time for mortgagee to produce particulars of mortgage including amount owing  30 days – time for person served with notice to start action after proper notice  15 days – time to respond to notice to prove lien  10 days – notice period for pre-trial application to determine validity of lien

Question and Comments Does it make any difference when requesting performance bonds, on what type of contract is being used: ie: lump sum vs unit price vs time and material contracts? If there are changes to a contract without a change to the value of the contract, is it better to do a Contract Addendum or a no value Change Order? RFP + Bidders questions & addendum, then Contract Execution, Addendum + Change Orders. Best way to file/handle???