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.
The timeline for placing a lien on a house in Ontario varies depending on the type of lien:
- Construction liens: Must be registered within 45 days of the last day of work or supplying materials. The registration process itself takes 1-2 business days once submitted.
- Judgment liens (Writ of Seizure and Sale): Can be registered immediately after obtaining a court judgment. The court processing time typically takes 2-3 weeks, and the actual registration with the land registry office takes 1-3 business days.
- Tax liens: Municipal property tax liens can be registered after taxes are in arrears, usually after missing payments for 2-3 years. Registration takes approximately 1-2 business days.
- Condominium liens: Must be registered within 3 months of payment default and takes 1-2 business days for processing.
After registration, the lien holder must generally “perfect” the lien by starting a court action within specific timeframes (typically 45-90 days depending on lien type) or the lien may expire.
The costs associated with filing a lien in Ontario include:
- Registration fees: Approximately $75-$90 to register with the land registry office
- Legal preparation fees: $250-$500 if using a lawyer to prepare documents
- Court filing fees: $200-$300 for perfecting the lien (if required) through the Ontario Superior Court of Justice
- Enforcement costs: $75-$200 for sheriff’s fees if proceeding to enforcement
- Renewal fees: $60-$75 if renewal is required before expiration
Additional costs may apply for title searches ($30-$50), serving documents ($100-$150), and potential court proceedings if the lien is contested. For complex cases requiring full legal representation, total costs can range from $1,500-$5,000.
Yes, liens in Ontario do expire if not properly maintained:
- Construction liens: Expire 90 days after the last day of work unless “perfected” by starting a court action. Once perfected, they remain valid until resolved through court proceedings or settlement.
- Judgment liens (Writs of Seizure and Sale): Valid for 6 years from the date of issuance but can be renewed for additional 6-year periods if filed before expiration.
- Tax liens: Generally do not expire until the tax debt is paid, though enforcement procedures may have time limitations.
- Condominium fee liens: Valid for 3 months from registration unless legal action is commenced to enforce the lien.
- Family law liens: Typically do not expire until the obligations are fulfilled, though specific terms may apply according to the Family Law Act.
It’s important to note that allowing a lien to expire means losing your secured claim against the property. Lien holders should carefully track expiration dates and take appropriate action to renew or perfect liens before they expire.
Accordion Content
