If you own a commercial property that’s leased out to a tenant, be aware that you might be on the hook for builders liens on construction projects that you were not even aware of.

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Under the BC Builders Lien Act, real estate owners are responsible for all improvements on their property of which they have knowledge. If your commercial lease allows tenants to undertake renovations or improvements, that clause is often enough to be considered sufficient knowledge. Under these circumstances, the law implies that you were aware of those improvements, and you could be liable for the tenant’s debt if an unpaid contractor files a builders lien. This applies even if you weren’t involved in the dispute or didn’t know about the improvements.

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You can protect yourself, however, by filing a Notice of Interest (NOI) on title. A NOI establishes that the owner’s interest in the land is not bound by a lien claim unless the improvement was carried out at the express request of the owner. Filing an NOI is a quick and relatively cheap solution to the problems posed by the BC Builders Lien Act. When purchasing commercial property, a NOI should be filed as soon as possible.

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