The information contained in this Guide is intended to introduce and assist members of the construction industry with regard to Builders Lien Legislation in force in British Columbia at the time of printing this Guide. It is in no way intended to replace consultation with legal or other expert professionals nor is it offering legal advice. We recommend that in all cases reference be made to an official copy of the Builders Lien Act [SBC 1997] Chapter 45.
What is the Builders Lien Act?
The Builders Lien Act provides a form of security to contractors, subcontractors, workers and suppliers who work on a building that is under construction – the builders lien. A builders lien is a charge on property by a person who has supplied work or material to a building under construction. A builders lien may be claimed by a contractor, subcontractor or worker.
How it works
The Builders Lien Act also creates a pool of money out of which claims may be paid, by requiring an owner to hold back 10% of each payment to the contractor – the builders lien holdback. The builders lien holdback provides two functions:
The Builders Lien Act helps to ensure that money intended to finance construction is used for that purpose by imposing a trust on money received by contractors and subcontractors in connection with the construction project – the statutory or deemed trust. The holdback account will be treated like a trust account. Contractors and subcontractors are deemed to be trustees of the money received by them. The persons engaged directly by them are the beneficiaries of the particular trust fund.
We offer the following additional links to assist you with any questions pertaining to the Builders Lien Act in British Columbia.