By Greg Price
A veteran lawyer of nearly 30 years is assuring the owners of 82 properties which had Registration of Builder’s Liens put on them late last month, that there will be no long-term financial effects of the process once the liens are removed.
Liens for as much as $175,000 were put on 82 different properties in the Town of Taber as part of the fallout of a financial spat between a contractor (Drew Communications) and subcontractor (Dragster Directional Drilling), involved in a $9.2 million dollar investment by Telus that was announced in March to roll out a fibre optic network for the community. Taber was selected as part of a Telus pilot project which would see 90 per cent of Taber homes and businesses be eligible for the upgrade, giving residents access to the fastest internet speeds Telus offers (currently as high as 100 Mbps). Roads and alleyways had to be torn up in utility right of ways to achieve the project.
“A builder’s lien is a lien that is registered against a property to secure a debt for any material or services that are performed on that particular piece of property that is described in the certificate of title,” said Doug Carle of Carle Law Office in Taber. “Joe Taberite owns a piece of property that has a back alley to it, almost invariably, where there’s a back alley, there is a utility right of way that grants the Town of Taber the right to give to a party, in this case Telus, the right to do work on that utility right of way.”
Carle noted in his nearly 30 years of practising law, he has not seen a lien filing as bizarre as the ones filed against 82 properties in Taber given the nature of the work that was being done.
“This is a risky situation, because they put a lien on some innocent third party’s house and we have people thinking it was just work done in an alley. But if a lien was put on, it means some work had to have been done on the person’s property, they may think it’s the alley but they might not know where their property line is,” said Carle.
In essence with a $175,000 lien put on a property, the subcontractor is implying the property’s value has had $175,000 of improvements done to it with the work to install the fibre optic network according to Carle.
“Theoretically and legally, yes those liens could be registered, but Telus has 100 per cent ability in getting those liens off immediately and then fight it out with the subcontractor for whatever they are worried about or are complaining about,” said Carle.
Carle assured affected landowners that no long-term effects will be felt financially after the liens are removed due to a Torrens Land Title System.
“That means when you apply for a loan, the only thing the bank looks at is the current state of the title. If someone comes in now and applies for a loan and they see a builder’s lien, what would happen is they would have to explain to the bank what this builder’s lien is about,” said Carle. “Credit ratings are based on debts that you have or have defaulted on, or paid properly. This is not a legitimate debt, it would never appear. It’s merely a notation on a Torn Land Title certificate registration which comes off. Banks listen to why liens are on there. This is pretty public now and they would know that you do not necessarily owe $175,000 to whatever company it is. But still a person’s property is their property. Your home is your castle. People who have called in, they are perfectly justified to be upset, but I have every expectation that a company as big as Telus will get this squared away.”
Although the owner of the property had made no request and had received no benefit on the property, Carle stressed all that is needed to register a lien is for a person to swear on a statutory declaration or an affidavit attached to the lien, a lawyer or the subcontractor, is that they have provided materials or services that benefited the land in question.
“The cost of the work is between Telus and the third party. The homeowner did absolutely no cost of these upgrades, not one penny was supposed to be legally obligated to the homeowner at all whether they wanted Telus or not,” said Carle. “I am going to assume it was the subcontractor using the Town of Taber utility right of way that is registered in favour of the Town of Taber. They then granted that right to Telus to use that right of way. Basically, this falls squarely on the town and Telus because the town allowed Telus to do this who hired out contractors, because most properties have a Town of Taber utility right of way. Otherwise, the only other way those subcontractors could have gone on someone’s property, they had to have received prior written consent of the homeowner, otherwise they are trespassing.”
Carle was conferring with a legal colleague from Saskatchewan with nearly 30 years of law experience as well, and neither has heard of this bizarre action of the direction the liens were aimed at in the homeowners themselves.
“The purpose of a builder’s lien is to ensure you can get paid out if you are successful in court,” questioned Carle. “But in this case, none of the registered homeowners contracted for this work. I find it hard to believe this subcontractor was doing $175,000 (of improvements) per lot. Legally, I think they are off the rails. Whoever filed these liens, in my opinion, could have looked at other options.”
Carle concluded that even if the worst-case scenario were to occur where the liens were kept on the properties in question and it was litigated, the ultimate remedy on a builder’s lien is you can have the property foreclosed and sold to satisfy the lien.
“There is not a judge in the world that would order someone’s house sold for work they did not contract for and they gained no benefit from. Most of these Telus things, they do it to someone’s house in hopes that someday, they will sign up for Telus,” said Carle. “But there’s no obligation for the person to ever use it.”