Builders Liens during the COVID-19 Emergency – Protect your Lien Rights

builders liens act coronavirus covid-19 covid19 virus

Please note the most recent update to this Act on our April 9, 2020 blog post, “Builders Lien Act Exempted from Suspension of Limitation Periods.”


By order dated March 26, 2020, the Minister of Public Safety and Solicitor General made an order that:

Every mandatory limitation period and any other mandatory time period that is established in an enactment or law of British Columbia within which a civil or family action, proceeding, claim or appeal must be commenced in Provincial Court, Supreme Court or Court of Appeal is suspended.

In basic terms, limitation periods, which are provided for in the Limitation Act, SBC 2012, c 13, are the deadlines that we all are subject to when it comes to commencing court proceedings. Mandatory time periods are those time frames found in other enactments, such as those in the Supreme Court Civil Rules BC Reg 168/2009, or the Builders Lien Act, SBC 1997, c 45. The suspension of limitation periods and mandatory time frames means that certain deadlines have been suspended for the duration of this order. This certainly does not mean that you should not seek legal advice or take steps to protect your legal rights in the meantime. In fact, the Province of British Columbia has deemed legal services to be essential during the COVID-19 crisis and most, if not all, lawyers continue to practice.

The Minister’s order may have a significant impact on the construction industry, and in particular time frames within the Builders Lien Act. In particular the Builders Lien Act, provides several important deadlines and time frames within which action must be taken, including:

  • a 45 day time frame within which a claim of lien must be filed (see section 20) ;
  • a 55 day holdback period for the payout of the statutory holdback (see section 8);
  • a one year limitation period to commence an action pursuant to section 10 of the Builders Lien Act; and
  • a one year limitation period to commence an action to enforce the claim of lien and file a certificate of pending litigation in respect of that action.

While it is arguable that the 45 and 55 day time frames are not “mandatory limitation periods” in accordance with the Limitation Act, they are likely considered a “mandatory time period … established in an enactment or law of British Columbia.”  However, the wording chosen by the Minister in linking the suspended time period to those “within which a civil or family action, proceeding, claim or appeal must be commenced in [Court]”, could be taken to mean that the time for filing claims of lien and for paying out the holdback have not been suspended.

The impact of the Minister’s order on other aspects of the Builders Lien Act are more clear, for example , the one year time frames to commence an action, which are specifically referred to as limitation period periods in the Builders Lien Act, and are time frames within which an action must be commenced in Court, are likely suspended.

In short, owners, consultants, contractors, subtrades, and suppliers all must continue to be cognizant of the time frames of the Builders Lien Act for filing claims of lien. If your available remedy is a Shimco lien, there is no reason to delay in commencing your action against the holdback before it is paid out. The current situation is fast evolving, you should consult a lawyer about your specific situation for filing a claim of lien, paying out the holdback, or commencing an action to enforce a lien against the holdback.

Typically, when claims of lien are filed, the provisions of ss. 23 and 24 of the Builders Lien Act can be relied upon to vacate claims of lien by applying to the court to post the security or the holdback.   In these extraordinary times, access to the courts has been limited to only certain “urgent” matters – and it is questionable whether builders lien matters are considered “urgent”. This may impair your ability to vacate claims of lien. Unless the parties agree to payout the lien claimant, or consent to posting security pursuant to an appropriate security agreement, if may be difficult to vacate the claim of lien.

Every situation is unique, and this holds particularly true for the Builders Lien Act and claims of lien. While this blog gives a general overview of the potential impact of the Minister’s order of March 26, nothing here should be taken as legal advice. We strongly encourage you to seek legal advice with respect to any construction related matters.

 

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