Liening into limitations: Claims for lien and the limitations period

This article appeared in the Summer 2026 issue of Build Manitoba magazine.

Much has been said about Manitoba’s recent change to its basic limitation period for construction disputes, which generally reduced the time to start lawsuits from six years to two years. However, the passage of two years may not always be the end of the story for an unpaid contractor or subcontractor. In particular, where a claimant has registered a builder’s lien, the deadline to start a court proceeding to enforce that lien is connected to the lien registration date, which may extend beyond the time limit for a straightforward breach of contract claim.

In Manitoba, The Limitations Act provides that a proceeding in respect of a claim must not be commenced more than two years after the day the claim is discovered. By way of example, if a contractor issues an invoice that becomes due and is not paid, claims relating to non-payment of the invoice will be deemed discovered as of the date payment should have been received. Thus, the contractor will generally have two years from when an invoice first became overdue to commence a breach of contract proceeding.

However, The Builders’ Liens Act expressly requires a lienholder to commence an action to enforce a claim for lien within two years after the date the lien is registered. In this way, the BLA contemplates a distinct statutory remedy for lienholders beyond the common law right to sue for breach of contract. Put simply, the limitation clock for enforcing a lien may not start at the same time as the breach of contract claim’s limitation clock.

Courts have recognized that lien rights are distinct from contractual rights.

In Stuart Olson Dominion Construction Ltd. v. Structal Heavy Steel, the dispute concerned the relationship between statutory trust obligations and lien rights under the BLA, (specifically, whether posting lien security to vacate a registered lien also satisfies, or extinguishes, separate trust obligations). The Manitoba Court of Appeal stated that, separate and distinct from the common law right to sue for breach of contract, a contractor has at its disposal the right to claim a lien over the property it improved.

More recently, in Sterling Parkway Residences Inc. v. Boretta Construction 2002 Ltd. et al, the Manitoba Court of King’s Bench reiterated that a contractor’s common law right to sue for breach of contract is supplemented by the BLA, which creates remedies (including lien remedies) that exist independently of contractual rights.

Taken together, these decisions support the view that a proceeding to enforce a registered builder’s lien may be a separate and independent proceeding from a breach of contract action. As a practical consequence, the two-year deadline to enforce the lien, running from the date of lien registration, might give the claimant a modest amount of additional time compared to a claim for breach of contract that is subject to a two-year discoverability-based limitation period.

Consider a scenario where a general contractor has completed its scope of work and is entitled to payment within 28 days of issuing a proper invoice. When the contractor is not paid within 28 days, it has discovered a potential breach of contract, and the limitation clock will start running under The Limitations Act. If no certificate of substantial performance has issued and the contractor proceeds to register its claim for lien on Day 60, the lien has been registered 32 days after the proper invoice became due and (in this example) the last day available to register a lien under the BLA. Fast-forward two years from the date that final invoice became due. If the contractor has not started a breach of contract action by then, the owner might assume the matter is now statute-barred. That reaction could be premature: It may still be possible for the contractor to start a proceeding to enforce its claim for lien within two years after the lien registration date, even though a related breach of contract claim is out of time.

Even if this feels like the kind of question that belongs on a final exam, it has real-world consequences. Owners, contractors and subcontractors should understand that creditors may have multiple potential remedies, contractual and statutory, with different deadlines. A prudent course for contractors and subcontractors is to treat limitation periods as unforgiving, to consider registering any lien promptly (where available) and to start any required court proceeding within the applicable deadlines.

The MLT Aikins Construction and Infrastructure practice group knows builders’ liens inside and out. We help project owners and contractors throughout the life of a project to strategically manage liens, holdbacks, trusts, liabilities and accounts receivable and ensure a successful project completion.

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