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ARTICLE · 25 JANUARY 2023

Does A Subcontractor Have A Claim For Unjust Enrichment Against The Owner?

The Court confirmed that if a subcontractor registers a lien and subsequently fails to perfect that lien claim, it does not have an unjust enrichment claim.

CanadaReal Estate and Construction

The Court confirmed that if a subcontractor registers a lien and subsequently fails to perfect that lien claim, it does not have an unjust enrichment claim. The lack of privity between an owner and subcontractor rarely results in a valid unjust enrichment claim. 

Each province has lien legislation governing the rights of parties supplying services and materials to construction projects. This legislation contains rigid limitations and requirements, as liens impact owners' property rights. 

If a subcontractor lien claimant fails to preserve and protect its lien rights under the applicable legislation, can that party commence a claim against the owner for unjust enrichment? The Ontario Superior Court of Justice considered this scenario in Zagros Homes Development Inc. v. Hans Steel Canada Corp.

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