Purchasers (new “owners”)

Purchasers may be liable even though at the time they take title the Certificate of Title is free of encumbrances; the question is whether or not the lien was filed in time.
 
Purchasers should negotiate a builder's lien holdback as part of their deal to purchase the land. A purchaser’s liability for liens is limited to 10% of the purchase price “of the improvement” (s. 35 of the Builders Lien Act) and so purchasers should negotiate such holdback into the contract of purchase of sale and only release the holdback after the time for filing liens has expired.
 
It is not clear whether “purchase price of the improvement” pertains to the total value of the land purchased, or just to the proportion of the purchase price attributable to the part of the land the work was done on i.e. is the whole property “the improvement”.

 

 

 

Need help with a builders lien issue? Click here for our recommended lawyer.