Choosing a Contractor · October 9, 2026 · 9 min read

BC Builders Lien Act: 10% Holdback, Deadlines & How Owners Protect Themselves

Under BC's Builders Lien Act, an owner paying for construction must hold back 10% of every payment, put that money in a holdback account on most private projects over $100,000, and keep it there for 55 days after the job is complete. Do that properly and the owner's exposure to subcontractor liens is largely capped. Skip it and an owner can end up paying for the same work twice. This guide sets out the holdback, the holdback account, the 45-day lien filing deadline and the steps an owner should take on every commercial project, with the section numbers so you can check each one yourself.

Key takeaway. Retain 10% of every payment (s.4). Deposit it in a holdback account at a savings institution unless the contract is under $100,000 (s.5). Liens must be filed within 45 days of completion or a certificate of completion (s.20). The holdback can be released after 55 days (s.8) if a title search shows no liens. A filed lien expires unless the claimant starts an action within one year (s.33).

This article summarises the Builders Lien Act, S.B.C. 1997, c. 45, as published on BC Laws (current to 22 September 2026). It is general information, not legal advice. For a specific contract or a lien already filed, speak to a construction lawyer.

What the Builders Lien Act Does

A builders lien is a claim registered against the land where construction work was done. It lets a subcontractor, supplier or worker who was not paid secure their claim against the property itself, even though they never had a contract with the owner. That is the part owners find surprising: you can pay your general contractor in full and on time and still have a lien on your title if the general contractor did not pay a subtrade.

The Act balances that risk with the holdback. If the owner keeps back the required amount and handles it the way the Act requires, section 34 caps what all lien holders claiming under a contractor can recover at the greater of the amount still owing to that contractor and the required holdback. The holdback is the owner's protection, and it only works if it is actually retained.

Two other provisions are worth knowing. Section 10 makes money a contractor receives on the contract price a trust fund for the people engaged on the improvement, so the general contractor cannot treat progress payments as general revenue while subtrades go unpaid. And section 15 sets where liens go: they are filed in the land title office, which is why a title search is how you check for them.

The 10% Holdback (Section 4)

Section 4(1) requires the person primarily liable on each contract or subcontract under which a lien may arise to retain a holdback equal to 10% of the greater of:

• the value of the work or material actually provided under the contract, and
• the amount of any payment made on account of the contract price.

Section 4(2) says the obligation applies whether the contract is paid in progress draws or in one payment at the end. In practice, every progress draw on a commercial project should show the gross amount, the 10% holdback and the net payment, and the holdback should accumulate across the job.

The same rule runs down the chain. A general contractor paying a subcontractor retains 10% from that subcontractor, and so on.

The Holdback Account (Section 5)

Retaining the money is not enough on most private projects. Section 5(1) requires the owner to:

1. establish a holdback account at a savings institution for each contract under which a lien may arise,
2. deposit the required holdback into it, and
3. administer the account together with the contractor the holdback was retained from.

Section 5(2) prevents money being paid out of the account without the agreement of everyone who administers it. Under section 5(6), unless the parties agree otherwise, interest accrues to the owner during the holdback period and to the contractor after it.

There are two exemptions in section 5(8): government, government corporations and designated public bodies acting as owner, and contracts where the aggregate value of work and material provided is under $100,000. A small renovation can fall under the threshold; most commercial fit-outs and new builds do not.

The consequence of skipping the account is spelled out in section 5(7): failing to pay the required amount into it is an act of default under the contract, and the contractor can suspend work on 10 days' notice while the default continues.

When a Job Counts as Complete

Every deadline in the Act runs from completion, so it matters what "completed" means. Section 1(1) defines it as substantially completed or performed, not necessarily totally completed. Section 1(2) gives the test for a contract: work is substantially performed when what remains can be finished or corrected for no more than 3% of the first $500,000 of the contract price, 2% of the next $500,000 and 1% of the balance. Section 1(3) treats an improvement as completed when it, or a substantial part of it, is ready for use or in use for its intended purpose.

A deficiency list does not stop the clock. A clinic that has opened to patients with a punch list outstanding may well be "complete" under the Act.

The cleanest way to fix the date is a certificate of completion under section 7. A contractor or subcontractor can ask the payment certifier — usually the architect or consultant named in the contract — to certify that its work is complete. The certifier must decide within 10 days and, if the work is complete, issue the certificate. Section 7(5) lets a court declare completion if the certifier refuses.

The Deadlines That Matter: 45 Days, 55 Days, One Year

The gap between 45 and 55 days is deliberate. It gives the owner ten days after the filing window closes to search title and confirm nothing has been registered before the holdback goes out.

Section 9 adds one refinement: where a certificate of completion has been issued for a subcontract and its own 55-day holdback period has passed with no liens filed under it, the contractor can be paid the holdback attributable to that subcontract early. On a long project, that keeps an early trade such as excavation from waiting until the end of the whole job.

Step by Step: How Owners Protect Themselves

1. Confirm whether section 5 applies. If the contract value is $100,000 or more and you are not a public body, you need a holdback account.
2. Open the holdback account before the first draw. Use a savings institution, name it for the specific contract, and set it up so payment out needs both you and the contractor.
3. Retain 10% of every payment. Calculate it on the greater of the value of work provided and the amount paid (s.4(1)), and deposit it into the account with each draw.
4. Require draws that show the holdback. Each progress claim should show gross value, holdback and net payment, and the running holdback total.
5. Fix the completion date. Ask for a certificate of completion under section 7, or record in writing the date the work or improvement was substantially complete.
6. Diarise day 45 and day 55. Day 45 is the last day to file a lien (s.20). Day 55 is the end of the holdback period (s.8).
7. Search title before releasing anything. After day 45, search the land title office for claims of lien against the property.
8. Release the holdback after day 55 if title is clear. Under section 8(4), payment after the holdback period discharges the liens it secures, unless a lien was filed or proceedings started in the meantime.
9. If a lien is on title, do not release that holdback. Deal with the lien first — see the next section — and take legal advice.
10. Keep the paper. Draws, account statements, the certificate and the title search.

A competent general contractor will expect all of this and run its own draws the same way. Asking how a bidder handles holdback and subtrade payment is a fair question when you are comparing contractors; our guide to choosing a commercial general contractor covers the rest of that conversation.

If a Lien Lands on Your Title

A filed lien does not mean you owe the amount claimed. It means someone has asserted a claim and has a limited time to prove it. The Act gives an owner several tools; which one to use is a decision for your lawyer, but it helps to know they exist.

• Notice to commence action (s.33(2)). You can require the claimant to start a court action and register a certificate of pending litigation within 21 days. If they do not, the lien is extinguished under section 33(5).
• Payment into court (s.23). An owner can pay into court the lesser of the total of the claims and the amount owing, provided it is at least the required holdback. Section 23(2) says the payment discharges the owner from liability for those claims and the claims are removed from title.
• Security in place of the lien (s.24). The court can cancel a lien when security is posted. Section 24(5) confirms that giving security does not make the owner liable for more than the section 34 limit.
• Let the clock run. If the claimant does not start an action within one year of filing, the lien is extinguished under section 33(1).

A lien on title can also hold up lender draws, a sale or a refinancing, which is the practical reason to resolve one quickly.

Conclusion

The Builders Lien Act protects owners who follow it. Hold back 10% of every payment, keep it in a joint holdback account on any private contract of $100,000 or more, fix the completion date, and search title before releasing the holdback after day 55. Those four habits cap your lien exposure at the holdback and keep subtrades confident they will be paid, which is good for the job as well as the owner. If you are planning a commercial project, we are glad to walk you through how draws and holdback will work before you sign. Our commercial construction page covers how we manage this work, and CCDC 2 vs cost-plus vs construction management compares the contracts the holdback sits under. For anything contract-specific, confirm with a construction lawyer.