Notice of Interest under the Builders Lien Act: What You Need to Know

The word lien can be intimidating. When combined with the word builder, it often causes even more concern. This reaction is understandable. But what exactly is the "Notice of Interest, Builders Lien Act" notation you sometimes see on a property title? And should buyers or realtors be worried?

 

Key Takeaway for Buyers and Realtors

If you are purchasing a property and notice a "Notice of Interest, Builders Lien Act" on title, there is no need for alarm. This is not a financial charge or encumbrance against the property. At our office, we typically request that the seller’s notary or lawyer have it removed during the conveyance process. However, not all legal professionals take the same approach. Still, the presence of this notice does not affect your ownership rights or ability to use the property.

 

Understanding a Builder’s Lien

A builder’s lien is a legal mechanism that protects workers and suppliers involved in construction. If someone provides materials or services but is not paid, they have the right to register a lien against the property. This must be done within a specific timeframe and serves as security for the unpaid work.

 

Importantly, this right is not limited to those hired directly by the property owner. It also applies to subcontractors and suppliers who may not have a direct relationship with the developer or landowner. As a result, a builder’s lien can be registered even if the owner has paid their contractor in full, which can feel unjust from the owner’s perspective.

 

What Is a Notice of Interest?

To help protect themselves, developers or landowners can register a Notice of Interest under the Builders Lien Act. This notice sets out that only those who have been directly hired by the owner or developer may file a lien.

This notice is intended to protect the original owner or developer during the course of the project. It does not offer any protection or benefit to future owners. For that reason, the notice is typically removed when the property is sold.

 

When Should It Be Removed?

In new developments, the developer’s lawyer may remove the notice once the property is sold to the first buyer. If this step is overlooked, it should be addressed during any future sale of the property.

 

For Legal Practitioners: How to Remove the Notice

If you are acting for the current owner and need to remove a Notice of Interest, you can do so in one of two ways:

1. By registering a Form C – Release, signed by the current owner; or
2. By filing a Form 17 – Cancellation, accompanied by a letter to the Land Title Office. The letter should be signed by the legal representative of the current owner and confirm that the notice has been fully discharged.