Alberta Court Releases Game-Changing Decision On Certificate Of Substantial Performance, Liens

In Chandos Construction Ltd. v. Twin Peaks Construction Ltd. (Chandos Construction), the Court of Queen's Bench of Alberta (Court) held that once the certificate of substantial performance (Certificate) is issued and major lien fund is paid out, subcontractors and suppliers can no longer claim a lien under the Alberta Builders' Lien Act (Act) for work done or materials supplied before the Certificate was issued. Chandos Construction limits owners' liability and is the first reported decision in Alberta dealing directly with this issue.

Owners should therefore ask contractors to issue Certificates as they can significantly limit their liability under the Act. Subcontractors and suppliers should be aware that they have 45 days (or in the case of an oil or gas well, 90 days) from the date on which a Certificate is issued to register a lien for work done or materials supplied prior to issuance of the Certificate.