A brief overview of builders liens and holdback accounts and subtrade liens.

1. BUILDERS LIENS
J. Marc MacEwing
October 15, 2014

2. HOLDBACK – RETENTION AND RELEASE
Theory - Must be retained, for 55 days, after which
may be released if no subtrade liens
Misconception - Must be released to contractor if no
subtrade liens
Reality - Frequently not retained/reverts to contract
balance; ie. subject to backcharge and set-
off

3. HOLDBACK ACCOUNT
Theory – Mandatory if not Provincial Government
owner or less than $100,0000 aggregate
value
Misconception – Significant sanction for failure to create
and deposit
Reality – Frequently not created, jointly
administered, segregated or fully funded

4. EXCESSIVE CLAIMS
Theory – Potential invalidity of lien and quasi-
criminal liability for false statement
Misconception – Discharge of lien for excessive claim
Reality – “Part of the game”/difficult to reduce/lien
remains for valid reduced balance

5. DISCHARGE OF SUBTRADE LIENS
Theory – Need contractual provision to specify lien
discharge as payment condition
Misconception – No liability to discharge without express
provision
Reality – Owner control of construction
funds/contractor’s general responsibility
for subtrade work

6. DISCHARGE OF SUBTRADE LIENS
Theory – Need contractual provision to specify lien
discharge as payment condition
Misconception – No liability to discharge without express
provision
Reality – Owner control of construction
funds/contractor’s general responsibility
for subtrade work