Navigation

Worker's Liens: what to keep in mind when registering a lien

Posted on September 10, 2018

There’s nothing worse than finishing up your work and then having an argument about getting paid. That’s when a worker’s lien can be helpful and help you get paid for work done and materials supplied.

What is a worker’s lien and why is it important?

Worker’s liens date back over a century but are still a useful way to secure your interests and get payment for any building work you have done under a contract. The Worker’s Liens Act 1893 (SA) (Act) sets out the procedure to follow but it is complicated and requires you to commence legal action within a strict timeframe after registering the lien.

A lien prevents a landowner dealing with the land in their favour, for example selling the land or registering a mortgage. When properly used a lien can secure the value of the building work performed against the interests of:

  1. the landowner;
  2. the occupier of land; or
  3. a contractor/sub-contractor who had provided a benefit to an owner or occupier.

A Notice of Lien is registered with the Lands Titles Office to secure the value of the building work against the owner’s or occupier’s interest in the land. It can however only extend to the building work actually done and the materials actually supplied under a contract. If the party who owes you money goes under then a lien can put you in a better position to get your money back than you might otherwise be in.

A worker or subcontractor is also entitled to claim a charge over any money payable under a head contract. Subcontractors can claim a charge over money payable by the owner or occupier to the contractor. This “freezes” the funds until the Court decides how much is due to the subbie.

What is the process and (most importantly) the timeframes?

It’s usually in your interests to try to sort out any payment issues amicably. If that’s not possible then claiming a lien and commencing legal action is an effective way to get paid!

Timeframes are really important and the process in the Act can be tricky (so it’s a good idea to get legal advice before starting!). If a lien is registered but you don’t issue legal action to enforce the lien then it will automatically lapse. It’s not possible to extend the time to bring an action to enforce a lien so it’s important to pay careful attention to this section.

A lien must be registered within 28 days of the amount claimed being due. Once registered, it will remain in place until:

  1. legal action to enforce the lien fails;
  2. the legal action is discontinued by you;
  3. the legal action is resolved and you register a Withdrawal; or
  4. the owner or occupier deposits the amount claimed with the Lands Titles Office or the Court so that the money replaces the lien as security.

You’re probably wondering how this fits in with the HIA Contracts. Everyone knows that legal action can be costly and time consuming so the HIA Contracts prefer conciliation or dispute reference over legal action. But this does not stop you from bringing legal action to enforce a lien. An owner or occupier faced with legal action could still issue a conciliation or dispute reference notice, however, it’s more common that a counterclaim will be made if the other party think there’s a reason you shouldn’t be paid. If a conciliation or dispute reference notice is issued after you have claimed a lien you still need to remember that the timeframes are really important and you will need to start legal action within 14 days from registration of the lien to preserve it!

So what should you do?

If you have any questions about this article, or believe you are owed money and want to take steps to get it back, don’t wait around, contact us! We are here to help and can advise you on any legal issue you may have.

View all articles