Every province in Canada has a construction lien statute. Which of the following statements related to construction liens is false?

The statement that a construction lien makes a property easy to sell or borrow against is false. The primary effect of registering a lien is to create an encumbrance, or a "cloud on the title," of the property. This makes the property very difficult to sell or mortgage. This difficulty provides a powerful incentive for the property owner to resolve the outstanding payment dispute and settle the claim with the lienholder in order to clear the title. The statement incorrectly describes both the effect of the lien and the resulting incentive for the owner.

A. This is true. The impracticality of repossessing integrated materials is the fundamental reason construction lien legislation was created.

B. This is true. The construction industry operates on a "pay-when-paid" or arrears basis, creating financial risk for those supplying labor and materials.

D. This is true. Owners rely on progress certifications from professionals to verify work is complete before releasing payment, which is standard contract administration.

1. Marston, D. L. (2016). Law for Professional Engineers (5th ed.). McGraw-Hill Ryerson. Chapter 14, "Construction Liens," pp. 238-240.

2. Samuels, B. M., & Sanders, D. R. (2015). Practical Law of Architecture, Engineering, and Geoscience (3rd ed.). CCH Canadian Limited. Chapter 10, "Construction Liens."

3. The Builders' Lien Act, SS 1984-85-86, c B-7.1 (Saskatchewan). Section 22 outlines the registration of a claim of lien against title.