By Scott Fairley, Partner
During the summer months construction projects are in full swing. As the construction season progresses and projects near completion, the time comes when contractors and subcontractors start to review their accounts and start to ask questions such as: When can I expect to receive my final draw? Am I going to get paid? Do I need to register a construction lien? While the hope is that full payment is made on all projects, it is worthwhile to take some time to be prepared to protect your interests as project move towards completion, in case funds don’t flow. The following is an outline of various items to consider in determining if you are prepared for the possibility that you may have to take steps to get paid, with particular reference to Construction Lien Act issues:
- Has a certificate of substantial performance been published for the contract under which you are working. If so, it can affect the deadline for registering a claim for lien. The time to register a claim for lien runs from the last supply / completion date or the date of publication of a certificate of substantial performance, whichever is earlier. It is up to you to keep track of whether certificates are published on your projects. Refer to the following website to review published certificates: http://www.dcnonl.com/csp/
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If you have contracted directly with the owner of the land, the 45 day time to register a lien begins to run on the date on which you completed or abandoned the project, unless a certificate of substantial performance was published prior to that date, in which case the date of publication governs.
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If you are a subcontractor, the 45 day period begins to run on the date of last supply of services or materials, unless a certificate was published prior to that date, in which case the date of publication governs.
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A lien exists once materials or labour are supplied to a project. To keep a lien, it must be “preserved” by registering it on title and “perfected” by commencing a court action or sheltering under another perfected lien. If a lien is lost it cannot be revived.
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Are you aware of the proper legal name of the party with whom you have contracted?
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Are you aware of the name of the owner of the project and the municipal address to allow title searches to be completed?
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If possible, you should obtain the proper legal description of the project to ensure that you are able to register your lien on the correct property.
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Have you calculated the amount owing, and to be included in the lien, without interest? The Construction Lien Act does not allow you to lien for interest, so it will be necessary to be able to separate the principal amount of the account.
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Is there a Labour and Material Payment Bond against which you could advance a claim
The above information will be useful in expediting your claim and ensuring that you do not run out of time before a claim for lien is registered.