Residential Contractors Beware: Trappings of New Brunswick’s ‘Notice to Owner’ Requirement

Residential Contractors Beware: Trappings of New Brunswick’s ‘Notice to Owner’ Requirement

April 13, 2023


As most in the industry will now be aware, New Brunswick’s Mechanic’s Lien Act has been replaced by the new Construction Remedies Act which applies to all contracts and subcontracts entered into on or after November 1, 2021.  (Note: the “old” legislation still applies to contracts entered into before this date).

One of the most unique features of the new Act is the Notice to Owner requirement which applies to residential projects.

Notice to Owner

Unlike the old legislation, the new Act mandates that contractors working on residential projects (i.e. where a building is used or is intended to be used for residential purposes) provide to the owner of the property a ‘Notice to Owner’ in a form prescribed by regulation. The Notice to Owner must be delivered no later than forty-five (45) days after the first day services are provided or materials are supplied.  The new regulations and forms associated with the new Act, including the Notice to Owner (Form 9) can be found here.

Form 9 provides the owner with the name of the contractor, the description of the land where the work is being performed, a short description of the improvement, and the names and contact information of any subcontractors supplying services or materials for the improvement.  Additionally, the Notice advises the owner that if any party supplying services or materials for the project are not paid, they will have the right to lien the property.   The Notice also reminds the owner of its obligation to retain a holdback in accordance with section 34 of the Act.

Under the current regulations, a Notice to Owner must be provided where the project fits within the following classes of prescribed buildings:

(a) single-family dwellings;

(b) duplex dwellings;

(c) triplex dwellings;

(d) fourplex dwellings;

(e) condominium units;

(f) cottages; and

(g) mobile homes  (s. 8, NB Reg 2021-81)

While the regulations do not specifically address mixed-use properties or cases where it may be unclear whether the project fits into a prescribed building class, the safest approach for the contractor is to serve a Notice to Owner in accordance with the Act.

In terms of timing, the Notice to Owner may be given prior to the provision of services or the supply of materials, but it must be served within forty-five (45) days of the first date of work or supply of materials.

Subsection 54(5) of the Act states that the Notice to Owner must be given:

(a) in the manner in which personal service may be made under the Rules of Court,

(b) by sending the notice by registered mail to the latest known address of the owner, or

(c) by sending the notice by electronic means.

If sent by electronic means such as e-mail, the contractor serving the notice must request and receive an acknowledgement of receipt from the owner, otherwise service is invalid under subsection 54(6).

It is important that the contractor keep a record of having sent the Notice to Owner, including, where applicable, the e-mailed acknowledgement from the owner in the event of a future dispute.

Failure to Serve

If the Notice to Owner is not provided by the contractor within the statutory timelines, the impact is draconian: the contractor loses its right to a lien.

Subsection 54(8) of the Act states:

If a contractor fails to give an owner a notice to owner within the time limit set out in subsection (4), the contractor is not entitled to register a claim for lien with respect to the improvement.

This could present a substantial issue for the unpaid contractor, who, in the absence of its lien rights, would be left to sue the owner without the specific procedures, protections and special status afforded to lien claimants under the Act.

Impact on Subcontractors

Luckily, the Act protects subcontractors who find themselves in a situation where a general contractor has failed to serve a Notice to Owner.   Subsection 54(9) preserves the lien rights of any subcontractor or other person to register a lien where there has been a deficiency in a Notice to Owner or a failure by a contractor to provide one.

Key Take Away

When in doubt, serve a Notice to Owner!

While this article contains an overview of the Notice to Owner requirement in New Brunswick, Construction law issues are often complex.   It is always prudent to speak with a construction lawyer whenever issues or questions arise.

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Cox & Palmer publications are intended to provide information of a general nature only and not legal advice. The information presented is current to the date of publication and may be subject to change following the publication date.