How Closely Related Must Work be to a Project to Give Rise to a Builders Lien?
I am often asked whether a person may claim a builders lien for the supply of work or materials to a construction project where the right to do so is not obvious. For example, persons who provide secondary services and do not engage in the physical construction of a project are often confused about whether they may claim a builders lien.
This is confusing, because the types of “lienable” work and services are expressed in the Builders Lien Act, S.B.C. 1997 c. 45 (the “Act”) in broad terms. Also, there are few cases which tend to establish those types of work and materials for which a builders lien may be claimed. This is presumably because the value of such work and materials may not justify the cost of litigation resulting in a judicial determination by the courts.
The Act requires that work or materials must be supplied “in relation to” an improvement to give rise to a builders lien. The phrase “in relation to” has been interpreted more narrowly than one might think given the potential scope of application for the phrase. In order to give rise to a builders lien, the work or materials must have a “direct” relationship with the improvement under construction. As well, the question of whether the supply of materials to an improvement may give rise to a builders lien may turn on the degree to which these materials are incorporated into the improvement. This may require an application of the traditional property law test to determine whether an item is a “fixture” or a “chattel”.
The courts of British Columbia have held the following work and materials may not give rise to the builders lien under the Act or its precursor legislation:
- Transportation of personnel and baggage to a construction site;
- Transportation of materials to construction site;
- Supply of board and lodging to personnel at a remote construction site;
- Construction supervision;
- Promotional work;
- Consulting and management services;
- Persons who temporarily attend an improvement to install, inspect, service, empty or remove equipment;
- Supply of free-standing and/or detachable equipment and appliances.
Most Provinces have enacted legislation similar to the Act. In other Provinces, courts have made the following findings regarding the types of lienable work:
- Commercial cleaning (allowed);
- Security services (allowed);
- Interior decorating (disallowed);
- Catering charges (allowed or disallowed, depending on Province);
- Supply of portable buildings (allowed);
- Well-digging (allowed);
- Legal fees (disallowed);
- Waste removal (allowed); and
- Snow removal (disallowed).
These lists are not exhaustive and the fact that these items were held (or not held) to be lienable does not mean they cannot give rise to a builders lien in all circumstances. The determination of whether work or materials have a sufficiently “direct” relationship with the improvement under construction is highly contextual. It may be that a court finds certain work or materials are more essential to the construction of an improvement depending on its location or whether alternative services are available. Where the ability to claim a builders lien is unclear, it would be prudent to seek legal advice before pursuing the matter further.