CAREERTIPS: 4 things Construction Professionals should know about a builder's lien

Here is my list of important points Construction Professionals should be aware of when it comes to enforcing the builder’s lien.

 

 1.What is a builder's lien?

A builder’s lien is a common law right which entitles the contractor to remain in possession of the property of the employer as security for payment in respect of:

• the construction of;
• the improvement of; or
• the reparation to

the property.

2. What are the requirements for a valid builders lien?

The following requirements must be met for a valid builder’s lien to arise and be enforceable by the contractor:

• the owner of the property (usually the employer) must be enriched;
• the amounts owing to the contractor must be due and payable to him; and
• the contractor must be and remain in possession of the property. 

 Possession is made up of two elements:

• the contractor’s physical control or occupation of the property; and
• the contractor’s intention to hold and exercise that possession over the property.

3. What happens if you give away possession?

The lien does not automatically revive if the contractor relinquishes its possession of the property and subsequently regains it.

4. What does it mean to waive your builders lien?

An employer will often require that the contractor waives its lien. Most of the standard form building contracts in fact make provision for the employer to provide a payment guarantee to the contractor in return for which the contractor waives his lien over any work done in terms of that contract.

Also read: 4 things Construction Professionals should know about Retention