BC Realtor Builder's Lien Guide: Holdbacks, Lien Priorities & Enforcement (2026)
Builder's liens are an invisible hazard in real estate transactions. A contractor who was never paid for a renovation three months ago can have a valid claim against a property you're about to close. Under BC's Builders Lien Act, these claims can survive title transfers, defeat mortgage priority, and derail completions entirely. This guide explains everything BC realtors need to know.
The Builders Lien Act: Framework Overview
BC's Builders Lien Act, RSBC 1996, c. 45 (now SBC 1997, c. 45) governs the rights of contractors, subcontractors, workers, and material suppliers to claim a lien against a property when they contribute labour or materials to an improvement and are not paid. Unlike personal debt, a builder's lien attaches to the land itself — not just to the owner's personal obligation.
| Concept | Definition / Rule |
|---|---|
| Owner | Any person having an estate or interest in land at whose request an improvement is made (including fee simple, leasehold, life estate — but not bare licensee) |
| Head Contractor | A contractor who contracts directly with the owner for the improvement (not a subcontractor) |
| Subcontractor / Supplier | Anyone who contracts with a head contractor or another subcontractor to supply labour, materials, or equipment |
| Improvement | Any addition, alteration, repair, or maintenance of land; includes demolition and clearing (s. 1 BLA) |
| Lien Fund | The unpaid amount owing by the owner to the head contractor — lien claimants can only claim from this fund |
| Holdback | 10% of each progress payment the owner must retain from the head contractor until the lien period expires |
| Completion Certificate | Certificate filed at LTO recording substantial performance; starts the 45-day lien period for head contract |
| Substantial Performance | When improvement is ready for use or capable of use for its intended purpose (s. 1 — not necessarily 100% complete) |
Key principle:The lien right is statutory — it arises automatically when qualifying work is performed and is not paid for. No agreement, no court order, and no advance notice is required. A subcontractor who poured concrete three months ago and was never paid can register a lien tomorrow, even after you've sold the property — if the 45-day deadline hasn't expired.
Who Can File a Lien — and for What
The Builders Lien Actcreates lien rights for a broad category of claimants. Understanding who qualifies is critical for assessing a property's lien exposure.
Who CAN File a Lien
- ✓ General contractors (head contractors)
- ✓ Subcontractors (any tier)
- ✓ Material suppliers (lumber, concrete, fixtures)
- ✓ Equipment lessors (cranes, scaffolding, heavy equipment)
- ✓ Engineers and architects (professional services for an improvement)
- ✓ Workers (individual labourers — right vests when wages are unpaid)
- ✓ Trust beneficiaries (holdback trust claims under s. 10)
Who CANNOT File a Lien
- ✗ Real estate agents (services not an improvement to land)
- ✗ Pure financing providers (banks, lenders)
- ✗ Surveyors (survey services only — not physical improvement)
- ✗ Property managers (management services only)
- ✗ Suppliers who contracted with sub-subcontractors beyond two tiers from owner (limited trust rights only)
- ✗ Claimants who waived lien rights by written agreement
| Claimant Type | Files Against | Maximum Claim | Deadline |
|---|---|---|---|
| Head contractor | Owner's interest in land | Contract price less payments received | 45 days after completion of contract |
| Subcontractor | Owner's interest in land | Sub-contract price less payments received | 45 days after last supply of work/materials |
| Material supplier | Owner's interest in land | Value of materials supplied less payments | 45 days after last delivery |
| Worker | Owner's interest in land | Wages earned and unpaid | 45 days after last day of work |
| Equipment lessor | Owner's interest in land | Equipment rental value less payments | 45 days after equipment last used |
The 10% Holdback: How It Works
The holdback is the cornerstone of the Builders Lien Act's protection mechanism. The Act requires owners to withhold 10% of each payment amount from the head contractor throughout the project. This retained amount creates a fund available to unpaid subcontractors and suppliers if the head contractor fails to pay them.
During Construction
- →Owner pays 90% of each draw to head contractor
- →Owner retains 10% in a separate trust account
- →Head contractor must also withhold 10% from subcontractors
- →Sub-contractors withhold 10% from their suppliers
- →Holdback fund = protection pool for unpaid lower-tier claimants
At Substantial Completion
- →Completion Certificate filed at Land Title Office
- →55-day lien period begins running
- →Owner may pay out the holdback after 55-day period expires
- →Lien search must be clear before releasing holdback
- →No liens registered = holdback can be released
If Liens Are Filed
- →Owner retains holdback until liens resolved
- →Owner does NOT release to head contractor while liens pending
- →Lien claimants claim against the holdback fund first
- →Deficiency: claimants can claim entire improvement's value
- →Owner may face double payment if holdback released early
Holdback Calculation Example
| Progress Draw | Draw Amount | 10% Holdback | Net to Contractor | Cumulative Holdback |
|---|---|---|---|---|
| Draw 1 (Foundation) | $80,000 | $8,000 | $72,000 | $8,000 |
| Draw 2 (Framing) | $120,000 | $12,000 | $108,000 | $20,000 |
| Draw 3 (Mechanical) | $90,000 | $9,000 | $81,000 | $29,000 |
| Draw 4 (Drywall/Finish) | $110,000 | $11,000 | $99,000 | $40,000 |
| Draw 5 (Substantial Completion) | $100,000 | $10,000 | $90,000 | $50,000 |
| TOTAL | $500,000 | $50,000 | $450,000 | Released after 55 days if clear |
Lien Registration Deadlines — Critical Timelines
The Builders Lien Act imposes strict deadlines for registering a lien. Missing the deadline by even one day permanently extinguishes the lien right — there is no discretion to extend the period. Understanding these deadlines is critical for realtors advising clients on recently renovated properties.
| Scenario | Deadline Trigger | Days to File | Notes |
|---|---|---|---|
| Head contract completed | Substantial performance or completion | 45 days | Filing a Completion Certificate starts this clock clearly |
| Subcontract completed | Last day sub supplied work or materials | 45 days | Each sub has its own independent clock |
| Materials last delivered | Date of final delivery to site | 45 days | Partial deliveries: each delivery is not a trigger — only the last |
| Worker's last day on site | Last day physically worked on improvement | 45 days | Individual workers each have their own 45-day clock |
| Abandonment of contract | Date improvement abandoned | 45 days | If both parties abandon, clock starts on abandonment date |
| Owner-builder completes | Completion of improvement | 45 days | Owner-builders are still subject to supplier/worker liens |
Common Misconceptions
- ✗ "The lien period only runs from final inspection" — wrong; it runs from substantial performance (can be earlier than final inspection)
- ✗ "Selling the property stops the lien period" — wrong; new owner takes subject to registered lien AND unregistered liens that arise within the period
- ✗ "A paid contractor can't file" — correct that they have no valid claim, but they can still register; discharge requires action
- ✗ "A title search showing clear title means no liens can be filed" — wrong; sub-contractor liens can be filed for 45 days after their last day of work regardless of what's on title today
How to Confirm the Lien Period Has Expired
- ✓ Obtain confirmation from general contractor of completion date
- ✓ Check LTO for registered Completion Certificate (starts 55-day holdback period for head contract)
- ✓ Verify all subcontractor last-supply dates (ideally confirmed in writing)
- ✓ Order full LTO title search including pending applications
- ✓ Obtain statutory declarations from GC confirming all subs/suppliers paid
- ✓ Involve lawyer — especially for recent major renovations
Lien Priority: Does a Lien Beat the Mortgage?
One of the most commercially important features of BC builder's liens is their priority over mortgages. This creates significant risk for lenders and buyers alike. The priority rules are set out in Section 23 of the Builders Lien Act.
Section 23 Priority Rule: "First Shovel in the Ground"
A lien claim has priority over a mortgage registered after work first commenced on the land. Priority runs from the date that improvement work first began — not the date an individual lien is registered. This means a mortgage registered in March could rank below liens filed in October, if the construction started in January.
| Date | Event | Priority Result |
|---|---|---|
| January 15 | Excavation begins (work commences on land) | This is the priority date for ALL liens arising from this improvement |
| March 3 | Construction mortgage registered at LTO | Mortgage ranks BEHIND liens (work already commenced before mortgage) |
| October 12 | Subcontractor files Claim of Lien for unpaid $45,000 | Lien priority dates back to January 15 — ranks AHEAD of March mortgage |
| November 1 | Owner defaults on mortgage; lender tries to foreclose | Lender must satisfy the $45,000 lien or sell subject to it |
Lien Ranks AHEAD of Mortgage When:
- → Work commenced before mortgage registered (s. 23(1))
- → Mortgage advance made after lien registered at LTO
- → Lender had actual or constructive notice of work in progress at time of advance
Lien Ranks BEHIND Mortgage When:
- → Mortgage registered before any work commenced on land
- → Mortgage was a purchase money mortgage (registered at time of purchase before construction)
- → Lien claimant signed a subordination agreement
Why this matters to realtors:When listing a property where construction financing was used, or where major renovations have been recently completed, the buyer's lender will conduct a lien search. If liens are found, the lender may refuse to advance. Even "minor" renovations can trigger lien exposure if a contractor went unpaid.
Buying & Selling a Property with a Builder's Lien
Discovering a lien on title during a real estate transaction is a serious problem — but it doesn't necessarily kill the deal. The outcome depends on the lien amount, the seller's cooperation, and the timeline available before completion.
| Scenario | Buyer's Risk | Resolution Options |
|---|---|---|
| Lien registered on title before acceptance | Buyer takes subject to lien if not discharged | Seller must discharge lien or reduce price; lender will require discharge |
| Lien filed after accepted offer but before completion | Lien can be enforced against property | Deal can complete if lien discharged from sale proceeds at closing |
| Latent lien filed within 45-day period, unregistered | Buyer gets clear title at closing, lien period may still run | Lawyer should obtain seller statutory declarations; title insurance recommended |
| Lien claim + court action filed | Enforcement action already underway | Court order or payment into court required; timeline may exceed completion date |
| Multiple liens from large renovation | Complex priority disputes | Holdback fund analysis required; may need all lien claimants' agreement |
Discharging a Lien — 4 Methods
1. Voluntary Release
Lien claimant files a Discharge of Claim of Lien at LTO. Usually follows payment or settlement. Cost: LTO fee only.
2. Payment Into Court
Owner pays lien amount + costs into court; applies for court order discharging the lien. Lien discharged from title even if claimant disputes the amount.
3. Lien Bond
Owner (or lender) posts cash bond or surety bond = lien amount + estimated costs. LTO discharges the lien; bond substitutes as security. Most common in active transactions.
4. Lien Expiry
Lien claimant fails to commence court action within one year of lien registration. Lien expires automatically. Apply to LTO for administrative cancellation.
Due Diligence Checklist for Recent Renovations
- ✓Order LTO title search including pending applications
- ✓Obtain written confirmation from GC of completion date and last sub date
- ✓Calculate 45-day window from last work date — if still open, flag risk
- ✓Request statutory declaration from seller that all contractors/suppliers paid
- ✓Ask seller for all contractor invoices and evidence of payment
- ✓Confirm no ongoing disputes with any contractor or worker
- ✓Recommend title insurance covering builder's liens (verify policy wording)
- ✓Build in condition precedent: seller to deliver clear title at closing
- ✓Consider holdback from sale proceeds if lien period not yet expired
- ✓Refer buyer to real property lawyer for final review
Builder's Liens in New Construction Presales
Builder's lien issues arise with particular frequency in presale condominiums and new construction. Buyers are completing on properties that may have ongoing lien exposure from trades who worked on the building but weren't paid by a subcontractor.
Presale Completion: Lien Risk Timeline
Strata note:When a lien is registered against a strata development before strata plan registration, it attaches to the entire parcel. After strata plan registration, individual strata lots may be lienable separately. Common property liens attach to all owners proportionally through their share interest. Always advise presale buyers to have a lawyer review the developer's lien clearance certificates at closing.
6 Client Conversation Scripts
Script 1: Seller who recently renovated
Your listing seller just completed a $80,000 kitchen renovation — you need to assess lien exposure before listing.
“"[Name], since you finished the renovation about [X weeks] ago, I want to make sure we're protected before we list. Under BC's Builders Lien Act, contractors have 45 days from the last day they worked to register a claim against your property. Before we go to market, I'd like us to: confirm the renovation was 100% completed, get the exact last day any tradesperson worked, and ideally get a statutory declaration from your contractor confirming all subs and suppliers have been paid. This protects you from any surprise lien issues that could delay or kill our sale. Can you reach out to your contractor today?"”
Script 2: Buyer seeing lien on title search
Your buyer's lawyer has flagged a builder's lien on title from an unpaid drywall subcontractor.
“"Good news is that your lawyer caught this before we completed — that's exactly why we do a title search. A builder's lien means a contractor who worked on this home claims they weren't paid. The seller now has to either pay this off or post a bond before we can close. We'll add a condition to our completion that the seller delivers clear title, meaning this lien is discharged by the completion date. In my experience, most of these get resolved — the seller either pays the contractor or the lien gets posted out with a bond. Your lawyer will ensure the discharge is filed before funds change hands."”
Script 3: Buyer's concern about undisclosed liens
Buyer asks whether they can be stuck with liens that aren't on title yet.
“"It's a real risk on properties with recent construction or renovation. BC law gives contractors 45 days after they last worked to register a lien — so if the drywall crew finished 30 days ago and hasn't been paid, they could still file. For this property, I'd recommend two things: first, get title insurance — most policies cover builders liens that arise after closing from work done before closing. Second, ask your lawyer to get statutory declarations from the sellers confirming all trades are paid. That gives you protection and a paper trail if anything surfaces later."”
Script 4: Investor buyer on new construction deal
Investor is completing on a presale unit — concerned about developer financial issues and lien exposure.
“"For presales, the good news is that liens against the developer during construction don't automatically follow your specific unit — but at the time of title transfer, we need to make sure the property closes with no liens attached to your unit or the common property. Your lawyer should order a full lien search at the Land Title Office the day before closing and confirm the developer has provided lien clearances. If a lien is discovered, we have the right to withhold completion funds until it's resolved. Title insurance on presales is non-negotiable in my opinion — it protects against liens that slip through the cracks."”
Script 5: Seller asking what happens if buyer discovers a lien after closing
Seller wants to know their liability if an old contractor files a lien after the sale completes.
“"If a lien is registered against your property after closing but relates to work done while you owned it, the buyer may have a claim against you for breach of warranty of title. This is why we want to make sure all your contractors are paid and the lien period has expired before we close. The purchase contract contains a warranty that you're delivering clear title — if a lien surfaces from your renovation, that warranty is breached. Your lawyer can help you get statutory declarations from contractors and potentially set up a holdback from the sale proceeds to cover any lingering exposure. Let's make sure we close this file cleanly."”
Script 6: Buyer agent asking listing agent about recent construction
You're the buyer's agent and the listing description mentions a major addition completed recently — you need more information.
“"I noticed the listing mentions the addition was completed 'earlier this year.' For my buyer's due diligence, can you confirm: (1) the exact substantial completion date, (2) whether a Completion Certificate was filed at the Land Title Office, (3) whether the 45-day lien period has fully expired for all subcontractors, and (4) whether the seller has statutory declarations from the general contractor confirming all trades are paid? My buyer's lender will likely require a clear lien search before advancing, and we want to flag any potential issues early. I'm happy to make this a condition in the offer to give everyone time to confirm the title is clean."”
Frequently Asked Questions
What is the holdback requirement under BC's Builders Lien Act?
The BC Builders Lien Act requires owners to retain 10% of each payment to head contractors until the lien period expires. This holdback protects subcontractors and suppliers who may file liens against the property. The holdback must be retained until 55 days after the head contract is substantially performed, or a certificate of completion is filed.
How long do contractors have to file a builder's lien in BC?
Under the Builders Lien Act, a lien claimant must file their claim of lien within 45 days after completion of a head contract or the last supply of materials or services under a sub-contract. This 45-day deadline is strictly enforced — filing even one day late extinguishes the lien right permanently.
Does a builder's lien take priority over a mortgage in BC?
Under Section 23 of the Builders Lien Act, liens registered after a mortgage can still have priority over that mortgage if the work began before the mortgage was registered. Priority runs from the date that work first commenced on the land, not from the date of individual lien registrations. This is why lenders conduct holdback searches before advancing construction loan draws.
How can a property owner discharge a builder's lien in BC?
A builder's lien in BC can be discharged in four ways: (1) the lien claimant voluntarily releases it by filing a Discharge of Claim of Lien at the Land Title Office; (2) the owner pays the lien amount into court and applies to have the lien discharged; (3) the owner posts a lien bond (cash or surety) equal to the lien amount plus costs; or (4) the lien expires because the claimant failed to commence a court action within one year.
What should a realtor check when listing or selling a recently renovated property?
For recently renovated properties, realtors should: (1) order a builder's lien search at the Land Title Office covering the past 45 days minimum; (2) ask the seller whether all contractors have been paid and obtain statutory declarations of payment; (3) verify no Claim of Lien is registered on title; (4) check whether a Completion Certificate was filed if a head contract was involved; and (5) ensure the purchase contract includes a condition that title is free and clear of all builders liens.
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