A construction tradesman, whether electrician, plumber, or carpenter, may find himself not being paid for work performed for a property owner. The tradesman’s work improves the value of the property and makes the property owner subject to a “construction lien.” The tradesman may register the construction lien against the property to protect himself. This lien acts like a mortgage securing the property as collateral for the value of the work performed until the property owner pays what is due and owing.
Registering a lien on a property is a fairly simple matter of filing certain forms in the registry office where the property is situated. That is why it is often thought that, when a construction tradesman has not been paid, he should lien the property. But registering the lien is just the beginning. A registered lien is only valid for 45 days. For the tradesman to “perfect” the claim for lien, other legal steps must be taken. The tradesman must commence a lawsuit with a statement of claim and then obtain a “certificate of action” from the Registrar of Titles. The certificate declaring the lawsuit then must be registered on the property within the 45 day period.
Where a relatively small amount of money is involved, taking the construction lien route, with court appearances, may not be the most cost effective route to collect a construction debt. If the construction tradesman knows that he can collect from the property owner once the dispute is over, a simple lawsuit for collecting the debt may suffice.