Construction companies work under a great deal of risk, relying on many different groups of people to supply labour and materials to a certain level of quality in order to keep a project going. Because of this risk, they are protected under the Construction Lien Act (the “CLA”) in order to be able to enforce their rights if there is a breakdown in cooperation.
Using Construction Liens To Protect Your Interests
Construction liens, like construction, can be very complicated. It’s important to contact a lawyer who can quickly and efficiently work through the details and do what must be done, salvaging your interests and ensuring that your own losses are minimized.
A lien-related dispute may escalate over many issues, including:
- Product deficiency
- Quality of work
- Delays in payment
- Disagreements over responsibility
- Breach of trust claims, when money that is paid to a contractor to pay a subcontractor is used for a different job
- If a contractor or subcontractor has a claim for a lien, it must enforce those lien rights within strictly specified time limits, or risk losing them.
Alternatives To Liens
If you miss the deadline for registering a lien, there are still options open to you:
Breach of trust claim
Since all amounts received for a project are supposed to be for the benefit of the project, if any funds are used for any other purpose you may be able to hold the persons in control of the corporation personally liable for the breach of trust and get compensation from them.
Labour and material payment bond
Many general contractors for large scale commercial, government and institutional projects have a bond with an insurance company, to protect the owner against possible claims. If your project has a bond, you may be able to file a lawsuit for compensation.
If neither of these options apply, a lawsuit may be your only option. This may prove worthless if your debtor is insolvent and you cannot personally pursue the directors of the debtor company.
Our Toronto construction lien lawyer is familiar with the practical realities of construction-related litigation and contractor disputes in the Greater Toronto Area. We represent builders, general contractors, subcontractors and material suppliers, and we know how important it is to get you back to business as soon as possible.