By Jacob Foster
The Builders Lien Act, SBC 1997, c. 45 (the “BLA”) provides contractors with a powerful tool to protect them from being exploited: lien claims. Lien claims are an extraordinary remedy that have significant consequences for those whose property is charged by the lien. Just as some owners may seek to exploit contractors, some contractors may seek to exploit owners by leveraging inflated lien claims to extract payment that is not owed. However, there are significant penalties applicable for contractors that abuse lien rights in this way.
Abusive lien claims are not only detrimental to owners, but also to other contractors and legitimate lien claimants, who may face significant delays in receiving holdback and other payments, as well as other negative impacts including reduced recovery on legitimate lien claims and increased legal expenses to pursue recovery. Fortunately, the BLA also includes provisions designed to protect parties from abusive lien claims.
Section 25 of the BLA allows for any of an owner, contractor, subcontractor, or lien claimant to apply to court to cancel a claim of lien in certain circumstances. One of those circumstances, under s. 25(2)(b), is where the claim of lien is vexatious, frivolous or an abuse of process. This article addresses one type of abuse of process: the inflated lien claim.