The right of retention in case of non-payment

One of the most annoying things that can happen to an entrepreneur is that the bill is not paid. With (rogue) buyers, a collection process then awaits with an uncertain outcome. If the creditor has the property under his control, the situation is sometimes different. Then the lien can possibly be exercised and the trump cards lie with the creditor.

In short, the lien means that an asset is not surrendered until the debt is paid. The most obvious way to do this is on movable property, such as a bicycle or a car, but it also applies to immovable property. The lien is thus also part of the toolbox of the contractor delivering a work. It is also a very strong right, which can be invoked even against a mortgagee and the receiver.

In order to exercise the lien, there are three requirements, which must occur simultaneously:

1. The claim must be due and payable;
2. The lienholder (the person invoking the lien) must have actual control over the property;
3. The claim must have sufficient connection with the property on which the lien is being exercised.

Claimability

The exigibility of the claim speaks for itself; the payment date of the invoice must have expired or there must be other agreements or circumstances showing that the account is due.

Consistency

There must also be sufficient coherence. This is usually not a problem, as the payment obligation often arises from the same agreement.

Actual power

In practice, most discussions arise over the criterion of actual power. This certainly applies to immovable property such as houses, business premises or land. The party exercising the lien, the lienholder, should (in principle) be able to decide who uses or enters the property. In the case of a lien exercised by a contractor, this involves, for example, a fence around the construction site or an access door to which only the executor has the key. This allows the contractor to determine who has access to the work and can thus exercise de facto power over the building.

Other facts and circumstances may also demonstrate this de facto power. Think of cases in which the lienholder actually makes the use of the property impossible, for example because large amounts of building materials are still lying around or large equipment has not yet been removed.

Abuse of lien

It frequently happens that the lien is abused, and it is exercised unjustly. For example, the owner can ‘just enter’, or other contractors, who do not work for or on behalf of the contractor exercising the lien, can enter the construction independently and at their own discretion. The contractor then does not control who enters the building, and thus lacks actual power.

If the lien is used, this can have major consequences. Consider the situation where an office, house, factory hall, sheds building land is not delivered. This leads to double burdens and possible consequential damages due to fines. If the lien is rightly invoked, this is the defaulter’s ‘own fault’. But if the lien is used incorrectly, the creditor ends up paying for it. In such cases, it is not uncommon for the remedy to be worse than the disease. We regularly see in proceedings that the damage then exceeds the original claim and the creditor becomes a debtor.

Therefore, always consult an expert if you are considering invoking the lien, or if you are faced with a lienor who does not hand over your goods!

Do you wish advice?

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