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1998/99 Legislative Session: 3rd Session, 36th Parliament

FIRST READING

The following electronic version is for informational purposes only.

The printed version remains the official version.

HONOURABLE MICHAEL FARNWORTH

MINISTER OF EMPLOYMENT AND INVESTMENT

AND MINISTER RESPONSIBLE FOR HOUSING

BILL 45 – 1998

BUILDERS LIEN AMENDMENT ACT, 1998

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the

Province of British Columbia, enacts as follows:

1 The Builders Lien Act, S.B.C. 1997, c. 45, is amended by adding the following section:

Exemption

1.1 Nothing in this Act extends to a highway, as defined by the Highway Act, or to any

improvement done or caused to be done on it by a municipality, the Minister of Transportation

and Highways, the BC Transportation Financing Authority or its subsidiaries

or any other public body designated by regulation.

Section 3 is amended by adding the following subsection:

(3) Subsection (1) does not apply to an improvement on land owned by the

government.

Section 5 (8) (

a) is repealed and the following substituted:

(

a) if it is an owner, the government, a government corporation as defined in

the Financial Administration Act or any other public body designated, by

name or by class, by regulation, or .

Section 32 is repealed and the following substituted:

Priority of secured lender

(1) Subject to subsection (2), the amount secured in good faith by a registered

mortgage as either a direct or contingent liability of the mortgagor has priority

over the amount secured by a claim of lien.

(2) Despite subsection (1), an advance by a mortgagee that results in an increase in

the direct or contingent liability of a mortgagor, or both, under a registered

mortgage occurring after the time a claim of lien is filed ranks in priority after the

amount secured by that claim of lien.

(3) In a proceeding for the enforcement of a claim of lien,

(

a) the court may order the sale of mortgaged land at an upset price of at least

the amount secured by all registered mortgages that have priority over the

claim of lien, court ordered costs and the costs of the sale, and

(

b) the amount secured by any registered mortgages must be satisfied out of the

proceeds of the sale in the order of their priorities and in priority over the

claim of lien to the extent provided under this section.

(4) A mortgagee who applies mortgage money in payment of a claim of lien that has

been filed is subrogated to the rights and priority of the lien claimant to the extent

of the money applied.

(5) Despite subsections (1) and (2) or any other enactment, if one or more claims of

lien are filed in a land title office in relation to an improvement, a mortgagee may

apply to the court for an order that one or more further advances under the

mortgage are to have priority over the claims of lien.

(6) On an application by a mortgagee under subsection (5), the court must make the

order if it is satisfied that

(

a) the advances will be applied to complete the improvement, and

(

b) the advances will result in an increased value of the land and the

improvement at least equal to the amount of the proposed advances.

(7) An amount secured in good faith by a registered right to purchase land has the

same priority over the amount secured by a claim of lien as has the amount

secured by a registered mortgage under subsections (1) and (2).

(8) For the purposes of this Act, the vendor under a registered right to purchase is

deemed to be a mortgagee under a registered mortgage, and the amount secured

in good faith by the registered right to purchase is subject to this

section as though

the amount had been secured in good faith under a registered mortgage.

Section 36 (2) is amended by striking out "section 32 (1)" and substituting

"section 32 (3)" .

Commencement

(1) Sections 1 and 3 to 5 come into force by regulation of the Lieutenant Governor in

Council.

(2) Section 2 is deemed to have come into force on February 1, 1998 and is

retroactive to the extent necessary to give it effect on and after that date.

(3) A claim of lien that was filed under the Builders Lien Act, S.B.C 1997, c. 45, on

or after February 1, 1998 and before

section 2 of this Act received Royal Assent

is unenforceable against the government as owner of the land or the government's

interest as owner of the land on which the improvement was made unless the

improvement was done at the express request of the government.

Explanatory Notes

SECTION 1: [Builders Lien Act, enacts

section 1.1] exempts from the Act improvements to

highways if the improvements are done by a municipality, the Minister of

Transportation and Highways, the Transportation Financing Authority or its

subsidiaries.

SECTION 2: [Builders Lien Act, adds

section 3 (3)] exempts the government from the application

section 3 (1).

SECTION 3: [Builders Lien Act, repeals and replaces

section 5 (8) (a)] exempts from the

holdback account requirement in

section 5 the government, government corporations

and public bodies designated by regulation.

SECTION 4: [Builders Lien Act, re-enacts

section 32]

establishes a priority rule respecting mortgages and liens;

empowers the court to order a sale of the property at an upset price;

directs the court to apply the proceeds of sale in a certain way;

provides that advances made after a claim of lien rank after the claim of lien;

applies the

section to a registered right to purchase.

SECTION 5: [Builders Lien Act, amends

section 36 (2)] makes a consequential cross

reference change.

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