More Frequently Asked Lien Questions

I am frequently asked by owners, contractors or construction managers, which subcontracts or material supply contracts are subject to lien holdback requirements? There is an easy answer to this question, and a hard one.

The Legislation

The easy answer is that the Alberta Builders' Lien Act only requires a lien holdback by the owner. So, only those contracting directly with the project owner are required by statute to submit to a 10% holdback – and it is the owner, not the contractor, that has the statutory obligation to hold back this amount.

It does not matter if the owner is dealing with a general contractor, trade contractor, material supplier or other service provider; if they have lien rights, and they are contracting directly with the owner, then the owner should (indeed, must) take a 10% holdback from them.