The BC Builders Lien Act is one of the most important pieces of legislation governing construction projects in British Columbia, yet many property owners and developers encounter it for the first time only after a dispute arises. Understanding how it works before you break ground is not just good practice – it is one of the most effective ways to protect your investment and avoid costly legal complications down the road.

What Is the BC Builders Lien Act?

The Builders Lien Act of BC is provincial legislation that gives contractors, subcontractors, workers, and material suppliers a legal mechanism to claim against a property if they are not paid for work or materials they have contributed to a construction project. A builders lien – sometimes called a construction lien or mechanics lien in other jurisdictions – is registered on the title of the property, which can prevent the owner from selling or refinancing until the matter is resolved.

The Act is designed to protect those who improve land and buildings. Because subcontractors and suppliers often have no direct contractual relationship with the property owner, the legislation gives them a path to payment that does not depend solely on the general contractor paying down the chain.

Who Can File a Builders Lien?

Any person who supplies labour, material, or equipment to a construction project in BC may have the right to file a lien. This includes general contractors, subcontractors of all tiers, workers, architects, engineers, and material suppliers. The lien must typically be filed within 45 days of the earlier of the date the lien claimant last provided services or materials, or the date a certificate of completion was issued for the project.

This relatively short window catches many parties off guard. If a supplier delivers materials near the end of a project and is not paid, the clock starts immediately. Missing the filing deadline means forfeiting lien rights entirely, regardless of how legitimate the underlying claim may be.

The Holdback Requirement

One of the most important provisions in the Builders Lien Act is the mandatory holdback. Property owners in BC are required to retain 10 percent of the value of work done and materials supplied throughout the course of a project. This holdback cannot be released to the general contractor until 55 days after the earlier of the date a certificate of completion is issued or the date the head contract is completed or abandoned.

The holdback exists to create a fund from which lien claimants can be paid if the general contractor fails to pay subcontractors and suppliers. Understanding your obligations as an owner is critical – releasing holdback too early can expose you to personal liability even if you have already paid your general contractor in full. This intersects directly with your construction financing arrangements, so it is worth reviewing how holdback timelines align with your draw schedule. For more on that, see our guide to construction financing in BC.

What Happens When a Lien Is Filed?

When a builders lien is filed against your property, it is registered on title and becomes a matter of public record. The lien does not mean the claimant is automatically entitled to payment – it simply clouds title and signals an unresolved dispute. The owner then has several options: pay the amount claimed, dispute the lien through the courts, or post security (such as a bond or cash deposit) to remove the lien from title while the dispute is resolved.

Lien claims that are not addressed promptly can escalate into legal proceedings and delay project completion, financing draws, or a future sale of the property. Even a small disputed invoice can tie up a transaction worth millions. Careful contract management and timely payment throughout the project are the most reliable ways to prevent liens from being filed in the first place. This is one reason why managing change orders carefully matters so much – undocumented scope changes are a leading cause of payment disputes.

Protecting Yourself as a Property Owner

The most effective protection against builders lien exposure starts before construction begins. Reviewing contracts carefully, understanding who your contractor is hiring as subcontractors, and requiring statutory declarations of payment at each draw are all standard practices that reduce risk. A statutory declaration is a sworn statement from the general contractor confirming that all subcontractors and suppliers have been paid up to the draw date – it is a condition that many lenders already require before releasing funds.

Working with a construction manager who has established relationships with local trades and a documented process for managing payments and contracts significantly reduces the likelihood of lien exposure. Disputes are far more likely to arise when project budgets are poorly managed or when scope changes are handled informally. Addressing these risks during the pre-construction phase – before contracts are signed – is where the most protection is created.

How Team Construction Approaches the Builders Lien Act

At Team Construction Management, our project management process includes clear contract frameworks, regular payment verifications, and statutory declaration requirements at every draw – because preventing lien exposure is part of delivering a project that closes cleanly. If you are planning a development in the Okanagan and want to understand how we protect your interests from start to finish, contact us today.

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