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A worker’s lien is a debt recovery tool which may be used by a builder or subcontractor to secure payment for supply of building material or building works which they have performed. This is achieved by the builder or subcontractor registering a lien over the property where the work was carried out.

The lien acts in a manner that is similar to a caveat or other charge as it prevents the owner from refinancing, selling or otherwise dealing with the property until such time as they have either satisfied the amounts owed to the builder / subcontractor or reached another agreement with them which includes the removal of the lien.  In South Australia, worker’s liens are governed by the Worker’s Liens Act 1893 (SA) (Act)

Who can register a Worker’s Lien?

A worker’s lien is a debt recovery tool which may only be used by a builder or subcontractor. Other restrictions on when a worker’s lien may be applied are as follows:

  • The builder or subcontractor must hold a valid and appropriate licence required to have carried out the works which are the subject of the lien;
  • The lien can only relate to debts for goods supplied or building work done on land or buildings fixed to the land and the amount of the debt can only be for the materials actually supplied or the portion of the building work actually completed.
  • The land or building which may be subject to the lien must not be owned by the Crown.

Do I need help to register a Worker’s Lien?

A worker’s lien may sound like a simple process, but it is rather complex. Under the Act you must follow a specific procedure and adhere to a strict timeframe before your workers lien can be deemed a valid.  For example, your lien will not be valid if you do not:

  • issue a final demand;
  • lodge the lien in the appropriate form with Land Services SA in accordance with the timeframe set out in the Act.  This timeframe is a strict timeframe and is often missed by people because they allow extension to payment periods;
  • within 14 days after lodging the lien with the Land Services SA, commence legal proceedings.

In the event you fail to follow the correct procedure or meet the strict timeframes as set out under the Act, your lien will become void. If your lien is void, you cannot reregister it or re-commence the process a second time without the leave of the Court. This can be costly and it cannot be guaranteed that the Court will grant you the right to re-register the lien.

Whilst a worker’s lien can be a good debt recovery tool, given their complex and technical nature, it is critical that you seek legal advice prior to commencing the worker’s lien process and / or the registration of the lien with Land Services SA.

If you are a builder or subcontractor who is owed money and are considering the worker’s lien process, please contact us at Clarke Hemmerling Lawyers (08) 8333 2130 and we can help you.

This Blog was written by Michelle Moore, Associate at Clarke Hemmerling Lawyers.

This blog post does not constitute legal advice and should not be relied upon as such. It is a general commentary on matters that may be of interest to you.  Formal legal or other professional advice should be sought before acting or relying on any matter arising from this communication.