I'm pretty sure it goes without saying that as listing realtors, selling realtors or mortgage brokers/lenders, you always pull a title when listing a property, before writing an offer, or taking a mortgage application as a mortgage broker/lender. 

Titles have a wealth of information, and we will go into that in future emails.

I recently received a panicked phone call from my seller. "Barry, my Realtor tells me there is a $25,000 builders' lien registered against my title. I paid that guy!" 

The first thing I said was, "Don't panic, we can fix this."

And this is generally true. But what are the rules on builders' liens?

The first and generally most useful rule is that the builder can't just file their lien and forget about it. The Alberta Land Titles Office Procedure Manual ("LTO Procedure Manual") is available online and is a handy document for this and other Land Titles situations. Here is an excerpt:

 "Expiry of Lien - A lien registered after July 1, 1985 expires if the lien claimant has not registered a C.L.P. in respect of his lien within 180 days after registration of the lien."

The reference in this excerpt from the LTO Procedure Manual to a C.L.P. is a 'Certificate of Lis Pendens,' which, in plain English, is a certificate of a pending lawsuit. 

The builder has to take real action AFTER filing his builders' lien. He has to start his lawsuit by filing a Statement of Claim. Then he has to file the Certificate of Lis Pendens (CLP) against the title, and he has only 180 days to do this. If he doesn't, you will be happy to hear it's a simple, inexpensive fix to get rid of the builders' lien. All it takes is a letter to the Land Titles Office pointing out that 180 days have passed without the builder filing his CLP. The Registrar of Land Titles will remove the builders' lien without charge.

In this case, 180 days had passed, so I told my panicked seller we could quickly and easily remove the lien from his title, allowing his sale to go ahead. This is the easy builders' lien situation.

It's much more complicated if the 180 days have not passed or my seller still needs to pay his builder (which he had done and had proof of).

It's even more complicated if the title shows the builders' lien and the CLP, indicating that the builder has launched his lawsuit.

What's the key takeaway for you? While builders' lien/CLP issues are usually solvable, you don't have to solve them yourself... you just have to be aware of the problem and that solving it involves a bunch of legal time. Therefore, your key takeaway is to look at the title early in the selling/buying/mortgaging process. 

If you do see a builders' lien, talk to your client right away and get some details. Then, pass those details on to me, or if I am not the lawyer (God forbid :)), to your client's lawyer. The more time we have to look at and solve the problem, the better for our mutual client, for you and for the law firm involved.

Your early title review is an important professional component of what you do for your client.

Protect yourself.

Cheers,

Barry