Better Late Than Never? Registration and Enforcement of “Expired” Builders’ Liens in Saskatchewan

This post was written prior to our January 2017 merger, under our previous firm name, MacPherson Leslie & Tyerman LLP.

The Holdback

Under The Saskatchewan Builders’ Lien Act (the “Act”), a holdback equal to 10% of the greater of:

(a) the value of services or materials provided; or

(b) the amount of any payment

must be retained by the payor at each level of the construction pyramid in connection with all payments on a contract or subcontract. (see: section 34 of the Act)

There are a number of specific rules which affect when a holdback may be released depending on the size of the project and whether certificates of substantial performance are being issued. These rules are found in Part IV of the Act and should be checked to see which provisions apply to the unique circumstances of your situation.

In general terms, except where a lien is registered, a holdback may be released 40 clear days:

a) after a contract (or subcontract) has been certified as “substantially performed “; or

b) after a contract has been either completed or abandoned (see sections 43-45 of the Act).

Can I Register a Lien after expiry of the 40 day period? And Should I?

Generally speaking, the answer to the question: “Is it better to register my lien late than never?” is “Yes”.

This is because of a unique Saskatchewan provision (section 49(5) of the Act) which leaves it open to a lien claimant to register and enforce a lien notwithstanding the “expiry” of the lien period. Where a lien is registered after the 40 day period, the lien is valid except against intervening parties and except against payments made after the expiration of the lien period, but before the late lien is registered. The late lien attaches only to that portion of the contract price not yet paid out to which the late lien claimant would have been entitled had they registered in time.

The bottom line is that you may still be able to collect on a lien after the 40 day period but the longer you wait, the less likely there will be funds to attach to at the end of the day.

As always, the advice of our construction law experts should be obtained prior to taking steps to enforce a lien claim because the Act contains a number of provisions which might vary our advice depending on the specifics of a given situation.