Construction Liens in Calgary - Post-Lien Filing Action
Contact our law firm to prepare and enforce construction liens in Calgary at 403-400-4092 or Chris@NeufeldLegal.com
Filing a construction lien with the Land Titles Office, is all too often the beginning of an arduous legal process, as opposed to the culmination of your disputing with party that contracted your services and/or construction materials. In Alberta, once a Statement of Lien has been registered at the Land Titles Office, the most immediate priority is managing the rigid timelines established by the Prompt Payment and Construction Lien Act (PPCLA). A registered lien is merely "preserved" and will automatically expire unless you take formal legal steps to "perfect" it within 180 days of the registration date. This 180-day window is a strict statutory deadline, meaning there is no judicial discretion to grant extensions if you miss it. You must ensure this date is calculated accurately from the date of registration and monitored closely throughout the process. The loss of a lien usually means losing your primary security interest in the property, which can significantly weaken your leverage. Therefore, keeping a precise calendar of all statutory dates is the foundation of a successful recovery strategy.
To perfect the lien, you must initiate a formal lawsuit by filing a Statement of Claim in the Alberta Court of King’s Bench. This legal document outlines the specifics of the debt, the nature of the work performed, and names all necessary parties, including the registered property owner. The lawsuit transitions the dispute from a mere notice on title into an active litigation proceeding that seeks a court-ordered sale of the land. If the lawsuit is not issued within the 180-day timeframe, the lien is no longer enforceable and can be struck from the title upon application. It is important to work with legal counsel to ensure that all parties who have an interest in the land or the contract are correctly identified. Missing a party or misstating the nature of the improvement can lead to complications during the trial phase.
Simultaneously with filing the lawsuit, you must register a Certificate of Lis Pendens (CLP) against the land title at the Land Titles Office. The CLP serves as public notice that the property is the subject of active litigation, effectively preventing the owner from selling or refinancing the land without addressing your claim. It is essential to understand that filing the Statement of Claim alone at the courthouse is insufficient to preserve your priority. Both the lawsuit and the registration of the CLP must occur within the same 180-day window to satisfy the requirements of the Act. Failure to complete this dual-filing process is a common procedural error that leads to the automatic discharge of the lien. You should obtain an updated copy of the certificate of title after registration to confirm that the CLP appears correctly in the list of encumbrances.
You must also be prepared for the possibility of the owner or another interested party serving you with a Notice to Prove Lien. This legal demand can drastically accelerate your timelines, as it typically requires you to commence your action and register a CLP within 30 days of being served. This "lapsing" process is designed to prevent contractors from leaving liens on title without a genuine intent to litigate the matter. If you receive such a notice, your original 180-day clock is effectively superseded by this much shorter window. Ignoring such a notice, even by a single day, will result in the Registrar being mandated to remove the lien from the title. Constant monitoring of your registered office or home address is required to ensure you do not miss the arrival of this critical document.
During the post-filing period, you should evaluate the benefits of interim adjudication, which is available under the prompt payment rules in Alberta. Adjudication allows for a faster resolution of payment disputes through a third-party expert whose decision is binding until a final court order or settlement is reached. While adjudication can lead to a quick payment order that is enforceable like a court judgment, it does not stop the clock on your lien deadlines. You must continue to manage the court requirements for your Statement of Claim and CLP even if you are actively participating in the adjudication process. Many parties use adjudication to resolve the cash-flow issue while keeping the lien in place as a backup security measure. This dual-track approach provides both immediate financial relief and long-term security for the full value of the claim.
If the owner chooses to "bond off" the lien, they will pay the disputed amount into court or post a lien bond to clear the property title. In this scenario, your lien is vacated from the land, but your security is transferred to the funds or bond held by the court. You still maintain a secured claim, but the focus of the litigation shifts toward obtaining a judgment that allows you to collect from that specific security. It is vital to ensure that the security posted covers not only the principal debt but also a reasonable allowance for legal costs. In Alberta, the court typically requires a security amount that includes the lien value plus an additional 10% to 15% for potential costs. This ensures that you are not left out of pocket for the expenses of the lawsuit if you are ultimately successful.
Finally, you must proactively move the litigation forward to avoid the risk of your action being dismissed for delay. Under the Act, a defendant may apply to have a lien discharged if the action has not been set down for trial within two years of the CLP being registered. Alberta courts emphasize the "summary" nature of lien proceedings, expecting parties to resolve these matters with reasonable haste rather than letting them linger. If you allow the lawsuit to languish without significant progress or formal steps, you run the risk of losing your security entirely. This would leave you to pursue the debt through a standard, unsecured breach of contract claim, which lacks the priority of a lien. Regular communication with your legal team is necessary to ensure that discoveries are completed and the matter is pushed toward a resolution or a trial date.
For contractors, subcontractors and suppliers requiring the legal services of a lien lawyer for preparing, registering and enforcing their construction liens in Calgary and surroundings (Airdrie, Cochrane, Bearspaw, Chestermere), as well as post-lien action, contact our law firm at 403-400-4092 or Chris@NeufeldLegal.com.
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