Written by Stuart Hankinson, Q.C., Jade Scrymgeour and Sharon Singh
On April 8, 2020, the Minister of Public Safety and Solicitor General published Ministerial Order No. M098, titled Limitation Periods (COVID-19) Order No.2. The updated Order repeals and replaces M086, previously covered in Suspension of Limitations Periods in British Columbia in Response to COVID-19 on March 28. The updated Order clarifies that the limitation period suspension does not apply to mandatory limitation periods and any other mandatory time period established under the Builders Lien Act, and division 5 of Part 5 of the Strata Property Act, which deals with builders liens. The clarification is a welcome addition. The updated Order does not apply retroactively, and takes effect on April 15, 2020.
What is a Builders Lien?
A builders lien is a tool to ensure payment for work in the construction industry. When a person, supplier of materials or a contractor is unpaid for work or materials supplied to a worksite they may be able to register a builders lien against title to the property. Once registered, the property will not be able to be sold or refinanced until payment or expiry of the lien.
Why Exclude Builders Liens?
A holdback under the Builders Lien Act provides security for contractors and subcontractors who supply labour and materials and limits the liability of owners who have hired a general contractor. Holdbacks are especially relevant in circumstances in which an owner hires a general contractor, who hires various subcontractors. The Builders Lien Act requires everyone in the contractual chain to retain a 10% holdback from all amounts paid in respect of work done. If a claim of lien has been filed against the property, the holdback money cannot be released. Therefore, the exclusion of the Builders Lien Act from the updated Order, provides businesses certainty when releasing holdback amounts.
Another reason for the exclusion of the Builders Lien Act likely stems from the location in which a claim of lien is filed. While most claims must be filed in court registries, a claim of lien is filed in the Land Title Office. Prior to COVID-19, the BC Land Title and Survey Office (LTSA) introduced web filing and welcomed public consultation. Though LTSA offices are now closed to the public, most services can now be provided online, through LTSA web services. This includes filing a claim of builders lien, transmitting title to a surviving joint tenant, and transmitting an interest to an executor.
As the province's response to the COVID-19 pandemic is rapidly evolving, we encourage readers to monitor official websites such as BC Courts and the respective websites of tribunals for up to date information. Moreover, readers must continue to monitor the reactivation of said limitation periods that would otherwise have expired.