Lien Fund Or Lean Fund: Setting-Off Against Part B Under The Alberta Builders' Lien Act

Those below the general contractor in the construction pyramid should be aware that an owner's express right to set-off in the prime contract might diminish protections under the Alberta Builders' Lien Act. Likewise, owners should note that clear language regarding set-off could significantly limit exposure on a project.

Key Takeaways:

• Clear language in a contract is crucial. Without an expressly worded right to set-off, the owner may not be entitled to set off against Part B of the lien fund.
• In the absence of clear contractual language, the test for equitable set-off may be strictly applied.
• Contractual terms allowing for a deficiency holdback may provide added protection.