A recent BC Supreme Court decision has clarified the parties that must be named in an action to enforce a builders lien involving common property.
In Primex Industries v. The Owners, Strata Plan LMS 1751, 2016 BCSC 2092, the BC Supreme Court ruled that a lien claimant must name all of the owners in a strata corporation, and cannot simply sue the strata corporation itself.
The Primex decision involved a strata property in Vancouver with over 100 strata lots. The strata corporation, on behalf of its owners, engaged Primex to conduct paneling work on the common property of the complex. A dispute between the parties arose and Primex was not paid. Primex subsequently filed a claim of lien against each of the individual strata lots.
Pursuant to the Builders Lien Act, Primex was required to commence a lien enforcement action within one year of filing its lien. Primex commenced an action shortly before the statutory deadline, but only named the strata corporation as a defendant and not the individual owners of the strata lots.
The strata corporation filed an application to extinguish the lien on the basis that Primex had failed to comply with the requirements of the Builders Lien Act by not naming each of the owners as defendants.
A builders lien is a right in rem; it attaches to the property in question, and, subject to the Builders Lien Act, the owner of that property must be a party in a subsequent lawsuit to enforce the lien. Under the Strata Property Act, common property is owned by the owners in proportion to their ownership of the strata lots. While the strata corporation was the statutory representative of all the owners in the complex, the Court noted that it was not an owner itself. Although the Court recognized that it may be cumbersome to require that each of the strata lot owners be named as defendants, there was nothing in the Strata Property Act or the Builders Lien Act that obviated this step.
Rather than dismiss the enforcement action immediately, the Court allowed Primex two weeks to amend its claim in order to add the strata lot owners as defendants.
The Primex decision stands as an important reminder about the need for compliance with the requirements of the Builders Lien Act. Builders liens are statutory remedies and judges often have little discretion to remedy procedural mistakes. As demonstrated by this case, a failure to properly comply with the statutory requirements can lead to the dismissal of a lien enforcement action, and ultimately, to the extinguishment of the lien itself.