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ARTICLE · 24 AUGUST 2022

Construction Owner Receivership: Clarifying Construction Lien Holdback Priority When There Are Multiple Building Mortgages

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It is common for construction project owners to finance projects through multiple mortgages, especially in times of rising construction costs. However, when an insolvency...

CanadaReal Estate and Construction
Sahil Shoor
Sahil Shoor
Michael Piaseczny
Michael Piaseczny
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It is common for construction project owners to finance projects through multiple mortgages, especially in times of rising construction costs. However, when an insolvency situation arises, holdback priority claims from contractors and subcontractors are particularly complex when there are multiple building mortgages involved. The Ontario Superior Court (Commercial List) provided new clarity in this regard in its April 29, 2022 decision in BCIMC Construction Fund Corp. et al. v 33 Yorkville Residences Inc et al., 2022 ONSC 2326.1

This case involved three lien claimants who provided services/materials to the owner of a condominium development project at 33 Yorkville Ave. in Toronto, Ontario. The condominium development project owner subsequently became insolvent and subject to receivership. The condominium property was sold pursuant to an order of the Court and a dispute arose as to how the lien claimants were to receive the distribution proceeds.

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