Guide to Placing a Lien on Property in Ontario

Guide to Placing a Lien on Property in Ontario

Placing a lien on a property in Ontario can be an effective way to secure payment for goods or services provided. A lien is a legal claim against a property by a creditor, ensuring they are compensated before the property can be sold or refinanced. This guide will help you understand the process of filing a lien in Ontario, along with its requirements and implications.

Understanding Liens in Ontario

In Ontario, the most common type of lien related to property is a construction lien. This type of lien is available to contractors, subcontractors, and suppliers of materials who have not been fully paid for their work or supplies on a property. Apart from construction liens, other types of liens can also be placed on a property, including mechanic’s liens and tax liens for unpaid property taxes.

Step 1: Determine Eligibility

Before proceeding, it’s crucial to determine if you are eligible to place a lien on the property. For construction liens, anyone who has provided labor or materials directly to the property and has not been paid may qualify. Ensure your circumstances meet the legal criteria for placing a lien in Ontario.

Step 2: Timing is Key

The Construction Act of Ontario specifies strict timelines for lien registration, generally within 60 days from the completion or abandonment of the work to preserve the lien, and 90 days to perfect the lien by starting legal action. Missing these deadlines can result in losing the right to the lien.

Step 3: Lien Registration Process

To register a lien, it must be prepared and filed with the required documents at the appropriate land registry office. The documents include a claim for lien that describes the amount owing, the services or materials provided, and the property in question. The claim must be verified by a sworn affidavit. Hiring a lawyer experienced in lien law is recommended to ensure the claim is prepared and filed correctly.

Step 4: Perfecting the Lien

After filing the lien, the next step is to perfect it by starting a legal action and registering a certificate of action at the same land registry office where the lien was filed. Perfecting the lien is crucial as it turns the lien into a lasting claim against the property, which can eventually lead to payment or a settlement.

Implications of a Lien

Placing a lien on a property can have significant implications. For property owners, it means the property cannot be sold or refinanced until the lien is dealt with, usually by paying the owed amount or reaching a settlement. For lien claimants, it offers a powerful tool to secure payment but also comes with responsibilities, such as following legal procedures and potentially engaging in court actions.

Conclusion

Placing a lien on property in Ontario is a legal process with specific requirements and timelines. While it can be an effective means to secure payment, it involves complexities that often require professional assistance. Understanding your rights, the process, and the deadlines is crucial to successfully placing and enforcing a lien.