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TIMELINES FOR REGISTRATION OF BUILDERS' LIENS

Under the Builders' Lien Act, a person who provides work or materials for an improvement to property may have a lien against that property.  The lien arises as soon as a person starts the work or first provides the materials to the property.  The Builders' Lien Act gives specific deadlines for registering a lien against a property, and if a person does not register their lien within the specified deadline their lien ceases to exist.  In general, a person claiming a lien against a property must register their lien against the property within 45 days from the date that they finished the work or last provided materials to the property.

In November of 2001, the Legislature of Alberta created an exception to this general rule for those people involved in construction in the oil and gas industry.  It extended the general deadline from 45 to 90 days for registering liens, to adapt to the payment practices that were unique to the oil and gas industry.  As a result, where a person provides work or materials to an improvement of an oil or gas well or an oil or gas well site, they have 90 days from the date that they last provided materials or finished work to register the lien.  

Recently an interesting development has occurred in the area of the oil and gas industry as it relates to the interpretation of the 90-day deadline for registration of Builders liens.   It has been argued before the Courts that for the 90-day rule to apply, the work or materials must have been provided to an oil or gas well, or an oil or gas well site.  Therefore if a person provides work or materials to a site that does not have an oil or gas well, then the regular 45-day rule will apply for registration of a lien.  The implications from this could be significant.  For example, those contractors involved in the construction of a pipeline that is not tied into a particular oil or gas well may be subject to the regular 45-day rule rather than the 90-day rule.  Another example may be where a contractor provides work or materials for the construction of a compressor station that is located on a property completely separate from an oil or gas well.  They also may be subject to the regular 45-day rule as opposed to the 90-day rule.  At this time, the issue remains undecided by the Courts and therefore anyone who works in the oil or gas industry should be aware of the possible implications that this may have on their business.  

By Glyn Walters
May 26, 2004