Encyclopedia
Builders' lien
A claim registered against land by contractors or suppliers who haven't been paid for work on it. The Builders Lien Act sets the rules, including holdbacks and time limits.
For example: A landlord completing tenant improvements keeps the required holdback so that a subcontractor's unpaid bill doesn't turn into a lien on the building. (Illustration only, not a real deal.)
Official source: Builders Lien Act (BC Laws)
Example only, not a real client. Say you hire a contractor to fit out your new shop. The contractor fails to pay a subcontractor, who registers a lien against the property. Because your lease and contract required holdbacks and lien checks before final payment, the problem is caught early and settled before it reaches you or your landlord.
What I’d tell a friend
On any construction work, follow the holdback rules and check for liens before you make the final payment. Ask a BC lawyer how the rules apply to your project.
Why it matters to you
Unpaid contractors can register a lien on title, which can hold up a sale or refinance. Owners need to manage holdbacks properly, and buyers should check title before completing.
How to use it in your deal
Owners should keep the required holdback from each payment for the statutory period and track when work is completed, so you're protected. Get lien searches before final payments. Buyers should search title for liens and ask about recent work; liens can be filed for some time after completion.
Tenants doing improvements should pay contractors properly, since liens can be filed against the landlord's property and leases often make tenants responsible. Landlords should require tenants to remove liens quickly. Lenders on construction loans hold back funds too, and title insurers ask about recent work.
The Act sets the holdback as a share of each payment and a short window after completion for filing; once that window passes without a lien, the owner can release the holdback. Keep a clear record of the date the work was substantially complete, because that starts the clock.
If a lien is filed, the owner can usually clear title quickly by paying the amount claimed into court or posting security, then dispute the claim. That's often the fastest way to save a closing or refinancing.
Mistakes I see
Not keeping holdbacks. Missing liens on title. Paying before the lien period expires. Not recording the completion date. Tenants ignoring liens their contractors triggered.
In BC and Vancouver
The Builders Lien Act sets holdback and filing rules.
Official sources: Builders Lien Act (BC Laws) · Land Title and Survey Authority of BC
What a lien is
In BC, contractors, subcontractors and suppliers who work on a property can, in some situations, register a lien against it if they are not paid. The lien can stay on title until it is resolved, which can hold up a sale or a loan.
BC’s Builders Lien Act sets the rules, including holdbacks that owners keep back from payments for a period after work is finished.
Protecting yourself
Keep the required holdback, get statutory declarations or lien releases from contractors before final payment and search title before you release money.
Tenants should check whether their lease makes them responsible for liens from their own work, which many leases do. Check with a BC lawyer on timing and amounts.
Questions to ask before you sign
- Is there a holdback?
- When was work completed?
- Are any liens filed?
- Who is responsible?
Holdbacks and the 55-day rhythm
When work or materials go into land, lien rights and holdbacks can follow. On projects with a certificate of completion, holdback release timing is often measured in a set number of days after that certificate—commonly discussed around 55 days in BC practice—so diaries matter.
Purchase contracts and construction deals should say who holds funds in trust and when they release. Ignoring liens around tenant improvements is how closings wobble.
Your lawyer owns Builders Lien Act steps on your facts.
Keep reading
Related terms: Holdback, Tenant improvements (TI), Title search
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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.