Registering a builders’ lien against lands for unpaid work or materials within the prescribed timelines is only half the battle. In order to preserve and, in essence, perfect the registration, a lienholder is required to then commence enforcement proceedings by filing both a Statement of Claim and a Certificate of Lis Pendens (CLP) within 180 days of registering its builders’ lien on title. If a lienholder fails to do either within 180 days of filing their lien, then the lien ceases to exist.

The COVID-19 pandemic created issues with, among other things, builders’ lien registrations. Pre-pandemic, builders’ liens were often registered on title to the applicable lands the same day they were submitted for registration to the Alberta Land Titles Office, making it easy to calculate the 180-day filing timeline. However, the pandemic caused significant increases to registration times. In particular, the Land Titles Office was no longer able to register a lien the same day it was submitted or within the prescribed timelines. This left lienholders at risk of losing their lien.

To address this, the Land Titles Office began to operate the Pending Registration Queue (PRQ). Under the PRQ system, a lien submitted for registration was first noted as a PRQ on title, until registration eventually occurred on title months later. While this addressed a lienholder’s requirement to firstly submit a lien for registration within the prescribed timelines, it led to other uncertainty. In particular, the PRQ system created a question with regards to the 180-day timeline to perfect a builders’ lien registration: did the timeline start from the PRQ date or did it start later, when the lien was eventually registered on title?

The Court addressed this question in CCS Contracting Ltd. v Condominium Corporation No. 1520090, 2023 ABKB 147[1] (CCS Contracting). In this case, the Plaintiff submitted a builders’ lien to the PRQ on April 8, 2022. The builders’ lien was ultimately registered on title on July 25, 2022, and enforcement proceedings were commenced by way of Statement of Claim on October 5, 2022. However, the CLP was not filed until November 21, 2022. While the Statement of Claim was filed within both the 180 days of the lien’s PRQ date and subsequent registration date, the CLP was only filed within 180 days of the registration date, but not the PRQ date. The Defendant ultimately brought an application seeking to discharge the lien on the basis the CLP was filed late. In essence, the Defendant claimed that the PRQ date is when the 180-day timeline began.

In dismissing the Defendant’s application, the Court in CCS Contracting held that the 180-day timeline begins to run from the lien registration date and not the PRQ date. As such, the CLP was filed in time and the builders’ lien was properly perfected. In coming to this decision, the Court concluded that the submission of the lien to the PRQ did not constitute “registration” under the Land Titles Act, stating:

[8] When an instrument is registered, it is assigned a nine-digit registration number. When it is put in the queue, it is assigned a “document registration request (DRR) number”. It is not registered when it is placed in the queue, but only sits in the lineup waiting to be examined. 

…

[10] A registration request is not registration. It only indicates that the Registrar will examine the request in the order it was requested at some future date. …

Interestingly, an earlier unreported decision noted as Datta v Contempa Carpet Co., 2022 CarswellAlta 3819 (Datta) came to a different conclusion.[2] Similar to CCS Contracting, the applicant in Datta also sought to discharge builders’ liens from title for failing to commence enforcement proceedings by way of Statement of Claim and CLP within 180 days of the PRQ date. The Court considered the operation of section 14.1(7) of the Land Titles Act, which states as follows:

14.1(7) Where, under a court order or enactment, an instrument or caveat must be registered within a specific period of time, the requirements of the court order or enactment with respect to the timing of registration are deemed to have been satisfied when the instrument or caveat is entered in the pending registration queue, unless the instrument or caveat is later removed from the pending registration queue under subsection (6)(a)(ii) or (b). 

[emphasis added]

The Court in Datta came to the opposite conclusion than the Court in CCS Contracting, finding that the 180-day timeline started from the PRQ date. In its analysis, the Court in Datta appeared to interpret “deemed” registration in section 14.1(7) of the Land Titles Act, as actual registration of the lien from which a lienholder should calculate the 180-day timeline.

Takeaway

The Courts in CCS Contracting and Datta both considered the interpretation of section 14.1(7) of the Land Titles Act in coming to their respective decisions, yet arrived at different results. Given the lack of clarity on this issue, the best practice is to assume that the 180-day timeline starts with the PRQ date. That is, unless, we get further clarity from the court in the future. We will continue monitoring the situation and provide updates. If you are in the construction industry and have questions about builders’ liens, or would like further information regarding any of the above, please reach out to the author, Janine Dhaibi, or your trusted legal advisors in Dentons Canada's Construction group.

[1] Decision of Applications Judge W.S. Schlosser in Edmonton, Alberta arising from a contested application.
[2] Decision of Applications Judge Mattis in Calgary, Alberta arising from an uncontested application.