Some of our clients in the construction or services industry are all to familiar with the impact of liens in commercial real estate matters. Essentially, there are two ways to file a lien. If there is an outstanding debt, we can sue the debtor within two years from the date the debt became outstanding. After an action is commenced and won, you receive an order for payment of money. If the order is unpaid by the debtor, you are considered a judgment creditor and have tools to enforce the debt. We can then place a lien on the home. We can also get a writ of seizure and sale or garnishment. Please note, in calculating the two year period, it is important to pick the earliest start date to ensure your rights are preserved. If the debtor acknowledges the debt, the two year limitation period is restarted from the date of acknowledgement (this may even take the form of partial payment).
A construction lien is a lien in favour of people who perform any work or service or who supply any materials for construction, repair or alteration of a building. It is a way to protect workers and suppliers and streamline the above process for obtaining a lien. It is a tool to use if contractors or subcontractors provide an invoice to a homeowner and payment is not made within the 30 day time period set out in the invoice.
The right to the lien arises when the first work or service is performed. The right to file a construction lien will expire unless they are registered within 45 days from the date the contract was completed or abandoned (in the case of a contractor) or the date the materials or services were last supplied (in the case of a subcontractor). If there was a certificate of substantial performance or certificate of completion issued on the property, the 45 day time period will run from the earliest of the above noted dates.
A lien may be registered any time before it expires. If, after the lien is registered, and the owner does not pay, then an action (lawsuit) must be commenced within 90 days from the date the contract was completed or abandoned, or the date of last work, as the case may be.
Please note, the date the contract is deemed to be completed is when the value of work remaining to be done or corrected is not more than 1% of the contract price, or $1,000 (whichever is less).
If you’d like to talk about commercial real estate or liens, feel free to contact J.P. McAvoy of ConductLaw at our Ottawa office.
ConductLaw is an Ottawa based business law firm with locations in Ottawa, Barrhaven and Kanata. Our professionals are experienced business lawyers who can help implement with commercial real estate, liens, or corporate structures that manage tax obligations, whether as a corporation, partnership, family trust, testamentary trust, or any other type of legal entity.
ConductLaw is an Ottawa based business law firm with three locations in the Ottawa area to serve clients. Feel free to call or write one of our professionals at firstname.lastname@example.org or 613.440.4888 for all of your business, commercial, real estate and estate planning needs.