On March 31, 2020, we provided you with an article regarding Ministerial Order No. MO86, which suspended limitation periods and other mandatory time limits to commence civil claims, and the anticipated effect of OrderMO86 on construction projects in B.C. and lien periods established by the Builders Lien Act, SBC 1997 c. 45 (the “Act”).
On April 8, 2020, the province released Ministerial Order MO98. Effective April 15, 2020, Order MO98 will repeal and replace Order MO86. Order MO98 maintains the suspension of all limitation periods and other mandatory time limits to commence civil claims, but has clarified that, effective April 15, 2020, the suspension of limitation periods and mandatory time limits does not apply to any limitation period or time limit in the Builders Lien Act, SBC 1997, c. 45 (the “Act”), or Division 5 [Builders Liens and Other Charges] of Part 5 [Property] of the Strata Property Act, SBC 1998, c. 43.
Order MO98 will be in place until the state of emergency declared March 18, 2020 in respect of the COVID-19 pandemic expires or is cancelled. Order MO98 is not retroactive and will only have effect as of April 15, 2020.
This new direction from the province clarifies that all limitation periods and other mandatory time periods established by the Act and the Strata Property Act will continue to apply as usual.
As we anticipated in our March 31, 2020 article, Order MO98 clarifies that the limitation periods relating to the filing of builders lien claims in the Act apply. As set out in detail in the Act, builders lien claims must be filed within forty-five days after the date on which a certificate of completion is issued, or (depending on the circumstances) the head contract is completed, abandoned or terminated, or the improvement is completed or abandoned.
Order MO98 has also clarified that the limitation periods and mandatory time limits in the Act (and the Strata Property Act) for commencing actions to enforce claims of lien are not suspended or extended. This means that the one-year limitation period for commencing an action to enforce a claim of lien, and the twenty-one day period for commencing an action after service of a Notice to Commence are in full force and effect and are not suspended or extended. If a contractor or material supplier has filed a claim of lien, that lien must be perfected by filing a notice of civil claim within one year of the lien being registered to title of the subject property. Similarly, if a lien claimant has been served with a Notice to Commence, that lien claimant must perfect its lien by filing a notice of civil claim within twenty-one days.
As with its predecessor, Order MO98 has no bearing on the release of holdback funds, and should have no impact Shimco lien claims, or liens against the holdback. We continue to anticipate that lien claimants are likely to commence actions to enforce Shimco liens at the earliest opportunity as these actions must be commenced prior to the payment out of any holdback funds.
A benefit to this new Order MO98 is additional clarity around the flow of contract funds. Owners and general contractors will no longer be faced with the question of whether or not the deadlines set out in the Act have been suspended. It is now clear that all deadlines and timelines in the Act relating to the flow of project funds, including deadlines applicable to payment certifiers and the release of holdback payments remain unaffected by Order MO98.
Although Order MO98 does not take effect until April 15, 2020, we recommend that contractors, material suppliers and owners continue to follow and comply with the builders lien deadlines set out in the Act in the intervening period.
Owners, contractors and material suppliers should continue to carefully monitor the government’s approach to ensure that they aware of all limitation periods and deadlines that will apply to their projects on the expiry or cancellation of the state of emergency.