Lien On Me: The Perils of Condominium Lien Missteps in Alberta

Written by: Sumit Kanwar

In the case of Avli BRC Developments Inc v BMP Construction Management Ltd, 2023 ABCA 147 (the “Case”), the Alberta Court of Appeal clarified that construction lien claimants must register their liens against all individual condominium units to encumber common property.

Failure to do so leaves the lien's validity to the court’s discretion under section 37 of the Prompt Payment and Construction Lien Act (the “PPCLA”), applicable only when no prejudice arises from non-compliance with section 34 of the PPCLA.

Background Facts of the Case

A construction manager was hired to build a condominium project in Calgary.

Midway through the build, the owner registered the condominium plan with the Land Titles Office, converting land ownership from a single certificate of title to individual certificates for each condominium unit. The foregoing created a condominium corporation, although no board of directors was established.

Disputes between the owner and the construction manager occurred, and payments were halted, causing liens to be filed.

Liens are commonly registered as a form of security for payment in Alberta.

Different claimants registered liens using varying methods—some against an "Additional Condominium Sheet," others against specific units.

The owner challenged these registrations, arguing they were improperly registered and the errors could not be cured.

Legislative Framework

Section 10 of Alberta's Condominium Property Act Regulation dictates that an Additional Sheet may be used for recording liens and other registrations.

Section 78(2)(c) further provides that liens registered against the Additional Sheet are also registered against the certificate of title for each unit but are limited only to when the work is requested by the condominium corporation. Therefore, claimants cannot rely on this provision where ownership and the corporation are distinct.

The PPCLA attempts to simplify the process of registering liens.

Section 34 of the PPCLA outlines the requirements for proper lien registration, with an emphasis on accurate land description.

Section 37 provides that if a lien substantially complies with section 34, it is valid if no prejudice is caused to any party.

Decision

The Alberta Court of Appeal upheld the liens as valid across all condominium units, noting that no units had been sold at the time of lien registration and that the owner controlled the corporation as there was no board of directors.

However, the court emphasized that registering liens against all units from the outset would have been more efficient and cost-effective, as intended by the PPCLA.

The Takeaway

Accurate lien registration is crucial. Reviewing land titles, confirming work requests, and ensuring compliance with statutory requirements is vital to registering and maintaining a valid lien and avoiding costly errors.

Disclaimer: The information contained herein is solely to be construed as legal information and not legal advice. Should you or anyone you know require legal advice on a lien in Alberta, please contact our office for assistance.