COVID-19 and the BC construction industry: Builders liens

On March 23 the Ontario and Quebec governments ordered that “non-essential” businesses close down, shortly followed by a list of “essential” businesses that were exempt from the mandatory closure. Quebec took a more cautious approach and ordered that all non-essential construction sites close. Ontario adopted a less restrictive approach and included the construction industry on its “essential” industries list.

British Columbia has taken a slightly different approach. On March 22 the BC Public Health Office issued a guide to the construction industry operating during the COVID-19 crisis, available here. The guide contains a number of restrictions including, but not limited to:

• There should be no more than 50 people in the same space under any circumstances.
• Where possible, employees should maintain a distance of two metres apart from each other.

On March 26 the BC government issued its list of “essential” services which included the construction industry, provided it continues to operate in accordance with the Public Health Office’s direction. The full list of essential services is available here.

In other words, even if BC were to order the closing of all non-essential services – which it has not done as of the date of this posting – it is expected that the construction industry would be excluded from such an order.

This is not to say it is “business as usual” in the construction industry, which still faces many challenges in the current environment, including supply chain issues, workers not wanting to –  or unable to –  attend work, and clients with significant cash flow challenges. It is anticipated that this will be a time of turbulence in the construction sector and companies will have to keep a careful eye on their own cash flow and watch their receivables.

As of the date of this posting, there are no changes or extensions to any of the deadlines under the Builders Lien Act. It continues to be necessary to file a lien within 45 days after the earliest “triggering” event of:

(a) the issuance of a certificate of completion;

(b) the completion, termination or abandonment of the head contract; or

(c) if there is no head contract, the completion or abandonment of the improvement.

The remedies under the Builders Lien Act are powerful and may, in many cases, be the best way to ensure payment on current projects. Liens can be prepared and signed, and then registered on title, without the need to meet your lawyer in person. We encourage all of our construction clients to protect their financial interests by filing builders liens as needed.

Learn more at our COVID-19 Resource Centre.

Ryan R. Lee is a Partner in our Litigation & Dispute Resolution Group, and is the firm’s Managing Partner.