The purpose of a construction lien is to provide statutory protections to contractors and subcontractors for the services and materials they supply to subject properties. That being said – these protections are not cheap. In order to address these costs and allow “Access to Justice,” the Construction Act affords specific remedies to allow smaller lien claimants to either assign, piggy-back, or bundle up their lien.
Section 67(1)(a) of the Bankruptcy and Insolvency Act (the “BIA”) establishes that the property of a bankrupt divisible among his creditors shall not comprise property held by the bankrupt in trust for any other person. This means that, monies held in trust – such as the CLA imposed trust – would not be considered as property of the bankrupt for distribution amongst creditors.
Congratulations! You have successfully preserved a construction lien. Now what? Section 36 of the Construction Act now requires that this construction lien be “perfected” by way of issuing a Statement of Claim and commencing an action in the proper jurisdiction to enforce the lien.
There’s a saying in the construction sphere – measure twice, cut once. This wisdom especially applies to construction liens. Once a lien is preserved (by registration or service), it can no longer be amended to address any errors in the lien. The implications? Devastating.
In order to secure payment, claimants must first “preserve” their construction lien by way of a Form 12. In addition to the other content requirements listed in Section 34(5) of the Construction Act, a party claiming a construction lien must sign, or verify, the lien through Form 12. But who can sign this document?
