Do Builders' Liens Really Work?

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I was asked recently by a contractor if there was really any value in filing a builder’s lien in Nova Scotia. Reading between the lines, I gathered what he was really asking was, is it worth the money in legal fees that it would cost to go through with a builder’s lien process. The answer is, it depends.

In Nova Scotia a builder’s lien must be filed within 65 days of the last day worked on the job. In theory a contractor can draft up their own lien and go to the registry of deeds and record it themselves. Most people use the services of a lawyer. On average, it will cost between $500 and $1000 to get your lien filed, so your claim must be worth several thousand dollars before you should even contemplate doing a lien. Once filed the lien only stays valid until 105 days past the last day of work on the job, unless the party filing the lien takes the second step of “perfecting” the claim by starting an action in the Supreme Court of Nova Scotia.

Even before you start the lawsuit a registered builder’s lien can be quite powerful. A property owner cannot sell that property or get any additional financing on that property until the lien is removed. So, if you are working on a major renovation or new build the home owner will not be able to get any further construction draws until the lien is removed. This alone will give a lot of home owners the incentive to deal with the lien.

The lien amount is also not carved in stone. You and the home owner can negotiate an acceptable settlement amount, even if that amount is less then the amount liened for. Many home owners do not like the idea of having lien against their property and still more do not like the thought of pending litigation hanging over their head. Both of these reasons are often enough to motivate a home owner to negotiate payment.

In some cases, particularly where the claim amount is smaller, it may be worth hiring a lawyer to send a demand letter which would state that unless payment in full was made immediately a lien would be placed. Sometimes just taking the step of hiring a lawyer is enough to show the homeowner you are serious about collecting.

If a builder’s lien does not appear to be the best choice for your situation, whether because the amount claimed is not huge or your 65 days have expired there is also the option of starting a lawsuit without a lien. You can start a claim in Small Claims Court or Nova Scotia Supreme Court and it will proceed like any regular lawsuit. Missing the builder’s lien window does not mean you lose your ability to make a claim against the home owner.

You may also want to check out our other blogs relevant to this topic:

Can I Represent Myself in Small Claims Court in Nova Scotia

How to Sue Someone in Small Claims Court in Nova Scotia

How to Defend a Small Claims Court Action in Nova Scotia

If you have any questions about this subject,  you can call us at (902) 826-3070 or email us at info@highlanderlaw.ca to set up a meeting with one of our lawyers at our Tantallon law firm. You can also schedule a no commitment Issue Review Consult for $100+HST where you have the opportunity to explain your situation to a lawyer and get basic advice before deciding whether or not you'd like to retain us.

 

By : Dianna M. Rievaj LLB, MBA Managing Lawyer

 

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