In the fast-paced world of construction, meeting deadlines is crucial to maintaining smooth operations. However, one set of deadlines that often falls under the radar, with potentially severe consequences, relates to construction liens. These legal claims are a key tool for parties seeking payment for their work, but they come with strict timeframes that, if missed, can result in the loss of lien rights altogether.
Construction Liens - An Overview
Construction liens, also known as mechanics’ liens in some jurisdictions, are legal claims made by contractors, subcontractors, or suppliers who have contributed labor or materials to a construction project but have not been paid. A lien allows these parties to claim a security interest in the property equivalent to the value of the unpaid work or materials, pending resolution of their claim.
The Crucial Timeframes
The timeframes for asserting construction liens can vary widely depending on your jurisdiction, and it is vital to be aware of these deadlines. For example, in Ontario, Canada, under the Construction Act, liens must be “preserved” within 60 days of the ‘last date of supply’, and then must be “perfected” (i.e., commenced as a court action) within 90 days of the last date of supply.
The ‘last date of supply’ generally refers to the last day when labor or materials were provided under the contract. However, it’s important to note that trivial work or deliveries, or work done merely as a service, does not extend the time for lien registration.
The Consequences of Missing Deadlines
If these deadlines are not met, the lien rights are extinguished, and the claimant loses this potent tool for securing payment. Without lien rights, the claimant may have to rely on contractual claims alone, which can be more challenging to enforce and may provide fewer remedies.
Navigating the Process
Given the strict timeframes and the complexities of construction lien law, it is strongly recommended to seek legal advice as soon as payment issues arise on a construction project. A legal professional can help identify the crucial deadlines and guide through the process of preserving and perfecting a lien, as well as advise on other remedies that may be available.
In conclusion, understanding the timing for asserting construction liens is as important as doing quality work in a construction project. Missing these key deadlines can result in substantial financial losses and jeopardize the success of the project. Knowledge and proactive actions are your best allies in preserving your rights and securing your payment in the construction world.