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Kevin Miller Miller Thomson Lawyers/Advocates 306.347.8333 kmiller@millerthomson.com
Builders' Liens after renovations Q: What is a builders’ lien? A: A builders’ lien is an “interest� registered on the title to your property. A lien will generally be registered when a home owner has contracted for an “improvement� to their property, but then fails to pay the contractor. Sometimes a lien will be filed by a subcontractor against your property if the contractor does not pay his/her bills to them. An improvement can be almost anything that adds value to your property: landscaping, a bathroom renovation, adding an indoor koi pond, etc. Sometimes a builders’ lien will be registered by an unscrupulous contractor or subcontractor in an attempt to get money to which they are not entitled. Most often it is the case that a contractor hasn’t been paid by an owner for one reason or another.
Q: Should I write a cheque for the full contract amount as soon as renovations are completed? A: When making payments to a contractor after a job is done, you are required to “hold back� 10 per cent of the total contract price for 40 days. The reason for this is that if a subcontractor didn’t get paid, they have a right to lien your property. A lawyer can help get rid of a subcontractor’s lien if you pay the holdback amount. If you didn’t hold back any money from the contractor, you might be on the hook for paying 10 per cent of the total price to a subcontractor even if you didn’t know they existed! By way of example, if a home remodelling costs $100,000, you are required to “hold back� $10,000 for 40 days after the work is finished, at which point you make your final payment to the contractor.
Q: What should I do if I am notified that a lien is placed on my property? A: If a lien is placed on your property, you will receive a notification from the Information Services Corporation and will likely receive a written notice of lien from the lien claimant. If you are comfortable, you should inquire from the contractor/ subcontractor what the issue is and what they require to voluntarily discharge the lien. If you are not comfortable talking to the person, or if the amount is large, you ought to contact a lawyer who specializes in builders’ liens. If the amount owing is overstated or the entire circumstances are just plain wrong, a lawyer can be of significant assistance. A lawyer will be able to determine whether the lien is valid and the best way to remove it from your property. n
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