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What is a property lien?

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What is a property lien?

A lien is a legal remedy that arises by statute alone and in particular from legislation called the Construction Lien Act. Although most of our legal foundation is British in nature, the notion of a construction lien is an American concept devised after the British burnt down Washington in the War of 1812 to spur reconstruction of Washington by giving workers a remedy for non-payment. 

The Construction Lien Act allows a builder or supplier of materials to take a charge (a mortgage is a charge by example) against title to the property on which work was performed and/or materials were suppliedas a form of security for monies claimed as due, payable and owing to the builder or supplier.  The process involves registering a claim for lien on title to the property in a process that is called preserving a lien, closely followed by a second step which involves initiating a lawsuit which is referred to as perfecting a lien.

There are strict timelines as to when a lien may be registered, and thus preserved and equally strict timelines as to when the lawsuit has to be commenced, which as noted, is referred to as perfecting the lien. The lawsuit involved in perfecting the lien will typically have the builder or supplier, as the plaintiff and the individual who allegedly owes that builder or supplier money and the owner and mortgagee as defendants (assuming that the alleged debtor and owner are not the same). The mortgagee is typically named as a defendant in situations where mortgage in question has been secured finance the improvement/project.

 

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Meet our expert
Dan Leduc

Dan Leduc
Norton Rose Fulbright Canada 

Dan practises primarily construction law and commercial litigation. Within construction law, he is frequently called upon to advise and represent owners, engineers, subcontractors, suppliers and builders in such front-end services as contract review, tender issues and general construction matters, as well as in litigation and arbitration.