Alberta Case Demonstrates The Challenges Of Liening For Work Done For A Tenant

Under Alberta's Prompt Payment and Construction Lien Act, a contractor performing work for a tenant may have lien rights against the landlord's interests in the property the contractor improved. The Alberta Court of Appeal recently ruled that whether such a lien is valid because the work was done for the benefit of or with the privity and consent of the landlord is always fact specific and often hard to prove.

A contractor may register a construction lien (formerly known as a builders' lien) against the title to the property subject of the improvements in an effort to collect for unpaid services or materials. The legality of doing so is complicated when the unpaid contractor was hired by the tenant of the property in question. The contractor may register its lien against the leasehold interest of the tenant but that is infrequently a fruitful way to collect. A lien against the fee simple interest of the property owner (landlord) must satisfy the requirements of the P