Parties in a Lien Action: Owners
At the outset of any Lien Action, it is of the utmost importance that a claimant uncovers the identity of the various parties involved, understands the roles of each of these parties, and determine the extent of their liability in an Action. In the following weeks, we will look more closely at each one of these and other parties and how the identity of each party relates to their role in a Lien Action.
Owners
Under section 1(1) of the Construction Act (“CLA”), an “owner” means,
any person, including the Crown, having an interest in a premises at whose request and,
a) upon whose credit, or
b) on whose behalf, or
c) with whose privity or consent, or
d) for whose direct benefit
an improvement is made to the premises, but does not include a home buyer.[1]
Taking a look at this definition, it is clear why the definition encompasses such a broad possibility of who can be considered an “owner”. Firstly, note that an “owner” has to have an interest in the premises, meaning that party would need to have some form of connection to the Subject Property. However, this definition is also broad enough to suggest that an “owner” does not need actual or physical ownership, but merely an “interest” in the premises.
Consider the following – a banking organization and/or a lender has a charge registered against the property. That bank might not be in physical possession of the premises and may not necessarily reside and/or operate from the premises, but it clearly has an interest in said premises.
Further, the sub-section that defines an owner as someone directly benefiting from the improvement extends liability to individuals who may in fact have ownership. Suppose the same factual scenario as above – a bank requisitions work from a general contractor, who in turn hires its own sub-contractor. If the sub-contract decides to lien down the road, it may well name the actual registered owner of the Subject Property, even if the party with ownership has had no other or prior involvement in the requisitioned work.
A more practical and realistic scenario in which this breakdown of finding the “owner” occurs in municipal construction. Consider any form of road-repair work located in your local city and/or town – for example, the renovation of Centre Street between Bathurst Street and Highway No. 7 in Vaughan, Ontario. Although the Regional Municipality of York may be the party that requisitioned the road-repair work for that strip of land, a lien claimant conducting an Abstract of Title search may discover that the registered “owner” of the land may be a different party, such as the Corporation of the City of Vaughan.[2]
Therefore, a cautious and reasonable lien claimant would most likely name both the Regional Municipality of York and the Corporation of the City of Vaughan as parties to a Lien Action, if one ever arose. This is just one example of how a party, who may have no contractual relation whatsoever to work being requisitioned, can still be involved as an “owner” by virtue of having an interest in the premises and receiving a direct benefit from the improvement provided.
Next time, we will continue with our exploration of the various parties involved in a lien action by discussing the difference between contractors and sub-contractors.
Until then!
The foregoing is for informational purposes only and should in no way be relied upon as legal advice. For legal advice tailored to your circumstances and business, please contact any of Sutherland Law's lawyers by email or telephone.
[1] Construction Act, R.S.O. 1990, c. C.30, s. 1(1).
[2] Please be advised that Sutherland law does not state or confirm that the Corporation of the City of Vaughan owns the plot of land described herein. This statement is made as a hypothetical and as an educative tool only, and is not to be used and/or relied upon.