A construction lien is a claim against a property made by a contractor or other individual/company who has supplied labour or materials for construction work being performed on that property. Construction liens are designed to protect a contractor/supplier’s unpaid account by essentially attaching that unpaid account to the subject property’s title.
The registering of a lien puts a roadblock (for lack of a better word) in the way of the property owner being able to secure or advance funds to complete the construction project. Accordingly, construction liens are an effective way for contractors/suppliers to protect their rights to payment as most construction projects cannot proceed without funding.
But how does a contractor/supplier know if they are eligible to register a construction lien?
The Construction Lien Act provides that a contractor must register a construction lien within 45 days of either completion or abandonment of the project, or the publication of the Certificate of Substantial Performance (“CSP”) for the project. A sub-contractor or supplier must register a construction lien within 45 days of their last supply to the project or, as above, the publication of the CSP. An important factor to keep in mind when calculating the 45 day deadline is that the clock starts ticking on the last day that work was performed or product delivered; attending at the project to fix deficiencies in a sub-contractor or supplier’s own work does not extend the time to lien.
If the registration of a construction lien does not secure payment within 90 days of the above criteria, the lien becomes the subject of a civil lawsuit and the parties proceed through the Court system until conclusion.
To discuss your construction lien needs, please contact Kim Norwood at 705-726-1181 or kim@owendickey.com.
