What is the Construction Lien Act
The concept of a lien goes back to medieval times when it initially applied to ships. In North America, Thomas Jefferson and James Madison came up with the idea of applying claims to buildings. The idea was to encourage builders and contractors to take on projects without demanding full payment in advance.
Without the lien system, builders would have a higher risk than owners. If you fail to make payments on your car or washer and dryer, a merchant can eventually repossess it. But what can a home builder do if the homeowner does not pay?
Construction liens give anyone providing labour and material a legal claim to the property
The building process in Ontario can be complicated and usually involves many different players, including owners, construction companies, contractors, subcontractors, labourers, and material suppliers. Unfortunately, the complexity of the process of construction itself creates an environment where disputes quickly arise.
Construction liens give anyone providing labour and material supply a legal claim on the land and property where they are working, much like a bank does when it takes a mortgage in return for lending money. If they’re not paid for their work, lien claimants can seek court approval to sell the property to collect on the debt.
A construction lien is, in essence, a charge or security on the premises improved in favour of a party who has contributed to the enhancement of value to the lands. The lien is also a charge on the holdback funds, which are required to be maintained by owners, contractors, and other parties in the construction pyramid.
Traditional Construction Pyramid
The laws are slightly different for each province as to hold back and the length of time the money is to be held. For our purposes, we will be using the definitions as set out in the Ontario Construction Lien Act.
Ontario’s Construction Lien Act establishes a system of lien and hold-back rights and trust provisions to provide financial protection to those who supply services or materials to a construction project.
Anyone who provides material or labour to your property has the right to place a lien. For whatever reason, a lien was placed, you, as the landowner, is ultimately responsible.
Even if a contractor tells you that he/she will be accountable for any liens when it gets to court, the law makes you ultimately responsible.
Here are some scenarios:
The foundation contractor subs out the excavation of’ the foundation. The excavation contractor hires a couple of labourers to do some hand shoveling and other work. After the first day, the workers get fired for loafing on the job, and the contractor does not pay them. It’s not a problem for either the foundation or excavation contractors.
The problem is the homeowners because the laborers can place a lien for payment against the property. The same holds true for the plumber that didn’t pay for the material supplied to do the rough-in. The supplier can place a lien against your property for money owed by the plumber.
If, for example, you assume that the drywall finishers quoted on texturing the ceilings, and they think they didn’t, and you threaten to withhold his money until the ceilings are textured, they can place a lien against your property for non-payment.
Lien Can Shut Down Your Project
Any lien placed on the property, even though its validity must be proven in a court of law, will have the power to stop your project. A lender will not advance any mortgage money after the lien has been registered because it ranks behind the claim for payment.
That is why your lawyer sub searches the property title for liens before the lender will advance a draw. If a claim has been placed, the lender will not advance any more money until the lien is satisfied.
If you cannot reach an equitable solution with the lien registrant, you can pursue the matter in court and have your project continue. Through your lawyer, you can pay the amount of the lien, plus twenty-five percent of costs, into court.
The caveat will need then he removed from your land title, and the lender will again advance funds. Having paid the lien amount into court, the bank will again be in a first position so that advances can continue. You will have the opportunity to challenge the lien in court.
Placing and Enforcing a Construction Lien in Ontario
There are a number of steps you will need to take to place, preserve, and perfect a construction lien. In Ontario, a lienholder must take action to preserve their lien within 45 days of the date the contract is completed or abandoned.
How you preserve your lien depends on if the lien attaches to a piece of real estate or not. If it does, you will need to register your claim for lien with the local land registry office. If the lien does not attach to a piece of real estate, the lien may be preserved by giving a copy of the claim for lien to the property owner.
The claim for lien is a standard form document in Ontario.
Your claim for lien will need to include certain information, including a description of the services or materials, supplied, the amount claimed, and a description of the premises to which the lien relates.
Once you have preserved your lien, you will then need to perfect the lien within 45 days. What this means is that you will need to file a statement of claim with the court requesting a remedy, usually sale of the property in question to satisfy the owner’s debts to you.
Where the lien attaches to a piece of real estate, the lien is perfected once the lienholder files a claim to enforce the lien and registers a certificate of action with the land registry office.
The certificate of action is a standard form document in Ontario.
What are the time limits for filing a construction lien?
The time limits to register a construction lien under the Ontario Construction Lien Act are as follows:
For a Contractor:
The construction lien must be filed within 45 days after the earlier of either:
a. the publication of the Certificate of Substantial Performance; or
b. completion or abandonment of the contract.
For a Sub-Contractor or Supplier:
The construction lien must be filed within 45 days after the earlier of either:
a. the publication of the Certificate of Substantial Performance; or
b. the date on which the subcontractor or supplier last supplied services and materials or the date the subcontract is certified to be completed.
In determining the last time of supply of services, you have to look at the last date on which there was work performed upon or in respect of the improvement. You do not look at attendance to fix deficiencies in the subcontractor’s or supplier’s work.
Once the construction lien is filed, to maintain the construction lien against the property, the lien claimant must start a lawsuit in Ontario and register a Certificate of Action against the title to the property within 45 days after the date that was the last possible date to register a lien on the property.
If the lawsuit is not commenced, and the Certificate of Action is not recorded on the property within this time limit, the construction lien may be removed from title to the property, and the lien claimant will lose the benefit of the lien.
10% Holdback
The original 18th-century American implementation was a simple system designed to minimize lawsuits. Then the lawyers got a hold of it and figured out how to abuse and counter-abuse the system and answered their own abuses with ever more complicated laws.
It’s now more complicated to preserve a lien than it is to sue directly for the money. On top of that, the holdback concept was introduced to protect homeowners against liens, which were originally meant to protect builders against owners who did not pay.
The result is that all construction companies and material suppliers in Ontario are now forced, not just encouraged, to finance at least 10% of any project, secured by a lien on your house. This is supposed to represent the “notional profit” for all of the companies involved in the renovation. Then the banks caught on, so if you’re borrowing money to renovate, they may refuse to lend you the last 10% until the work is done.
Here’s the key point to understand: since this 10% holdback is essentially a loan from your builders, not a final payment, that means that you agreed to pay it when you made the progress payments. The question that takes 45 days to resolve is who should the loan be paid out to, nothing to do with the quality of the work.
Here are some excerpts from the act that you should be familiar with.
THE ACT STATES “HOLD BACK” means the 10 percent (Ontario) of the value of the services or materials supplied under a contract or subcontract required to be withheld from payment by the homeowner for 45 days.
WHEN CONTRACT SUBSTANTIALLY PERFORMED
For the purposes of this Act, a contract is substantially completed,
a) when the improvement to be made under that contract or a substantial part thereof is ready for use or is being used for the
purposes intended; and
b) when the improvement under the contract is capable of completion or where there is a known defect, correction at a cost, not more than
- Three percent of the first $500,000 of the contract price.
- 2 percent of the next $500,000 of the contract price, and
- One percent of the balance of the contract price.
WHEN THE CONTRACT DEEMED COMPLETED
For the purpose of this Act, an agreement shall be considered to be completed, and services or materials shall be deemed to be last supplied to the improvement when the price of completion, correction of a known defect or last supply is not more than the
lesser of:
- 1 percent of the contract price; and
- $300
As you can see, the Construction Lien Act is best left for your lawyer to deal with. It is sufficient for you to know the act exists and are aware of the basic statutes that make up the Act.
If you are using a lawyer, you should not wait until the last day to contact him/her to file a lien. You should make contact as soon as possible to allow time for the preparation of the necessary paperwork to file the construction lien.
Also, the lawyer may require time to determine the proper description of the property (which is needed to register the lien). If the property does not yet have a municipal address or the property is not in the land titles system, it can take some time to complete the manual searches at the registry office and inquiries to determine the description of the property necessary for registration.
Once the construction lien is filed, to maintain the construction lien against the property, the lien claimant must start a lawsuit in Ontario and register a Certificate of Action against the title to the property within 45 days after the date that was the last possible date to register a lien on the property. If the lawsuit is not commenced, and the Certificate of Action is not registered on the property within this time limit, the construction lien may be removed from title to the property, and the lien claimant will lose the benefit of the lien.
From the contractor’s perspective, getting paid is something that is easier to say than it is to do. You want to recover as much of what is owed to you at the least net cost, in the shortest possible time. Not the least of the frustrations encountered in reaching this goal is the delay and expense involved in the litigation process.
Even the relatively straightforward steps necessary to prosecute a lien claim from registration through to trial can be used by a skilled defense lawyer to defeat an otherwise legitimate claim. While it was once intended to be a summary remedy, it is now clear that a full range of interlocutory procedures is available in lien proceedings, such as motions for summary judgment, security for costs, third party process, examinations for discovery and other steps. By the time the court proceedings are finished, everyone involved loses except the lawyers.
The best way to avoid liens is to keep everything in writing and communicate openly with everyone involved. Always use a detailed contract, specifying material quality, quantity, and labor supplied. Use change orders whenever necessary, and discuss all aspects of the work with trades and suppliers before the start.
Can a lien be placed on a residence by a contractor who isn’t licensed and no contract was signed?
Thank you:)
Yes, a werbal contract is still a contract.
a contract verbal or otherwise still needs to meet the test for solidifying that contract, being:
1 – offer
2 – acceptance (unequivocal)
3 – consideration
4 – true intentions (for lack of better words)
Wrong. No court will enforce some BS verbal contract because it’s hearsay. There is also an explicit need for a written contract for work over $1500.
hi , i hired finish carpenter to work for $12000.00 and finish with time line but he didn’t and was paid $7000 and left the job ,while did less then half of the job and without any contract he registered the line , what can i do thx
can an architect place a lien on a homeowner’s property if the homeowner doesn’t want to pay the architect due to delaying a homeowner‘s project for years and the homeowner having huge added cost due to this?
A contractor, drywaller owes me 1400 for labour. I have photos and sent him a invoice for one property. Two others exist. He is not going to pay me. Can I put a lien against the property. What do I do? Who do I call?
Is the time limit 45 days total or 45 business days?
45 Days.
We are a limestone company in the following situation.
We had an oral contract with the builder, who paid a small deposit. Being urged by the builder, we manufactured pieces worth $25.000. However, the builder has refused to accept the delivery because of the unspecified problems with the clients (house owners). Recently the former has severed all contact with us. We have been storing the pieces for over a month now. The fact that we don’t know anything about the owners significantly complicates the situation. We have unsuccessfully tried finding out about the owners and contacting them. We have also considered enforcing shipment on them but the premises are closed and seem to be empty.
The builder gave us $ 10.000 deposit, the pieces we manufactured are worth $ 25.000, plus the price of storing the pieces.
What would the best course of action be?
I am not a lawyer but I think that you have no course of action. The best solution for you would be to sell your stuff to someone else. What exactly did you manufacture?
I know this is too late, but Olli would have been able to make a lien claim.
Read the cases of Central Supply Co. 1972 Ltd. v. Modern Tile Supply Co. ad also Sunview Doors Limited v. Pappas
And Olli, most lawyers will do a free consult. Best to talk to a lawyer or now with recent changes to the Construction Lien Act, if the amount owed is $25,000 or less talk to a knowledgeable paralegal experienced with construction law.
You have a couple remedies. You can try and enforce the contract with the builder or you sue them for breach of contract. In your situation, the most likely solution is to sell your goods and keep the deposit. If the goods sell for under 15,000.00 then you can seek to recover the difference from the builder. In this case you wouldn’t have a construction lien.
What were the products?
I don’t have a response to your question but I live in Toronto Canada and if you service Toronto I would appreciate you telling me the name of your company as I will be building a new home and will require limestone for the construction.
Thank you
Lou
Can a construction lien be placed against a government building? I subcontracted work from a commercial company that had a contract with the company that won the bid to oversee the renovation of a government building.
Yes.
I hired a designer in Ontario to design a house, verbally it was agreed to have the project finished in 3 months, it took over one year. Can a designer put a lien on the property for the unpaid balance which is 25% of the total. Can I sue the designer for delays and costs associated with that if the deadline was agreed verbally, but written contract has no deadline. Thanks JP.
You really need to consult a lawyer and explain the whole situation.
I’m a supplier who was working for a contractor on a commercial property. The tenant (a convenience store), paid the contractor who has failed to pay all the suppliers. The contractor cannot be located. Can I lien against the property even if it was a commercial tenant who entered into an agreement with the contractor?
Yes.
we have a ccd1 2008 with a contractor for a porject in Ontario canada
he failed to notify us in writting and give 3 days notice to correct defficiencies. and asked us to leave site then continued to modify our works without our permssions and or directions form engineers(ours our design)
i say he breeched the contract and we should be compensated any costs and for same if any.
I am a contractor hired by a custom home builder to frame 2 houses. We have a very detailed contract signed by both parties. The contract sights several milestones once completed I would be able to invoice. The last invoices the contractor failed to pay in full sighting the milestones were not a 100% completed. He is correct however due to design mistakes corrections needed to be made to fully complete certain milestones, furthermore additional work for future milestones was done but not recognized. I was then informed that the contractor felt he paid out more monies then work completed at which point we stopped all work trying to resolve the matter. After several days no progress was being made so I went thru the entire project to itemize how much work was left put hours and dollars against my findings. I came up with $10,500.00 of labour left to be paid out added 25% for a buffer which brought it to about $13,200.00. With extras total amount outstanding was $31,800.00. I emailed my findings to the contractor with no response. Several days later I emailed the contractor to try and resolve the matter at which point he informed me that he has terminated the contract due to me breaching it. I have met with him since to seek money from him and tells we are even. The contract states that if either party feels there is default by the other party they in turn shall notify the other party by registered mail a default with the contract and allow 7 days to correct the default. If this is not done then it would constitute a breach and give way to seek compensation. At no point has this happened. These are both very large renovation. I feel I am owed money and am wondering if a construction lien is possible.
Thanks
You need to contact a lawyer before 45 days are up.
can the home owners also put a lien on the contractor’s house? If the contractor refuses to refund the deposit for unfinished work, what’s the best formal action that can be taken?
We hired a company to install a new kitchen in a new home, was told it would be a 2 day install. Cupboards delivered on February 27 and it is still not completed. Last work(minimal) done was March 27, email March 30 stated they were waiting for replacements which would be in the following week. No contact or work done since then. Today they have surfaced, want to do some work next week. I have since hired someone else to complete the project. I have paid 50% of the project, are they entitled to anything else? Can they sue me?
Hi Tammi, we are in the same boat. Our kitchen contractor took 4 months to install after telling us it would take 3-4 days. He got angry when we asked him for an installation schedule so we could schedule other trades around him. We treated with respect and we feel he purposely extended our job and did a bad job to get back at us for asking him to be accountable. The kitchen remains unfinished with major deficiencies outstanding that are the contractor’s responsibility to remedy. We have sent a demand letter, but are getting the run around from his paralegal and no further contract from the contractor. We have paid 90% of the value of the contract. According to the Construction Lien Act, the contractor has 45 days to file a lien. To be sure you’re in the clear, it would be wise to consult a lawyer just to be 100% certain. You can attempt to sue him in small claims court. Whatever you do, do not let him back on your property or that 45 day thing starts over again!!! Another option is to file a complaint with the Ministry of Consumer Affairs and provide a detailed review on both Homestars.com and TrustedPros.ca to protect other people from hiring this person/company. Seems there is nothing out there to protect the consumer!!! This Act needs to change!
Split a fence with my neighbour who agreed to pay half, job is done, now he refuses to pay, I have paid the contractor in full, is it possible for me to place a lien on his house?
Please consult a lawyer. We are a custom home builder and do not know the law applicable in this case.
how do I know if the contractor has paid for materials used in building my addition, and how do I know that the suppliers will not put a lien on my home?
You don’t. Use due diligence when choosing a contractor.
Would it protect me from liens if I get a signed paper from every subcontractor that they were paid in full (after 45 days).
How to document subcontractor abandoning the site or not performing up to standards(OBC).
Thank you
I do not know. It depends on who supplied the work. Was it general contractor? His employees can also place a lien.
When a lien is placed on your property, what kind of notifications do you (the homeowner) receive? We are well past the 45 days at this point, but not sure if it’s possible that he could have filed and we were not advised. Here’s the backstory:
We paid out our contractor for a bathroom reno in full and he disappeared/stopped corresponding March 31/17, on a job that was supposed to be completed Dec 21/16. Up until that point he was on site and/or in contact with us daily. When he stopped showing up and corresponding (mostly via text – all saved) it was 1 day after we paid out the final balance (stupid, I know) because he claimed he had a personal emergency and was in desperate need. There were still many parts of the job that were incomplete – shower drain not installed, grout not finished, caulking incomplete, room not painted, drywall not patched, etc. We hired another contractor to finish off what we could not handle ourselves with the help of handy-family-members.
Today (July 11/17) he reached out casually saying that an electrician (who is a personal friend of his) that he brought in to do some of the work had “brought something to his attention” and wanted to speak about it in person next week… Our assumption
Thanks so much!
The homeowner does not receive any notification.
Hi,
i have placed a lien on town property which was lent out to a developer in order to put up a sales office for 7 building project which will take for the next 10 years, The town is now claiming that they will remove the lien as they have no direct contracts with any of the trades hired for putting up this sales center & its their land not the developers land.
The Town claims that they have lent this property out to the developer because it is in alignment with the towns revitalization plan to boost the city.
The 7 buildings are now sold out, the development of the first phase is set to start, and it will be developed on the adjacent land that the lien is on. The developer is not budging on paying any time soon. & i think the town doesn’t want to push the developer on settling the liens, infact i think the Town is on the developers side as these projects are to boost up the city.
I have perfected the lien & have judgment against the developer, infact they never put up a defense & just ignored any correspondence from any of the lien claimants, there are about 5 liens on this land (im the 2nd) all associated to the sales office.
What do you think my chances of collecting are, does the town have any right to remove the lien without forcing the developer to pay.
also, once the sales office is removed the same land will be used to develop future phases of the “revitalization project”. Can they develop on land that has a lien, can a developer even be granted a building permit?
We are a product manufacturer and have a subcontractor to install the product on a commercial building (commercial owner is paying us in full – we pay the subcontractor). Question, does the subcontractor put a construction lien on the commercial building?
Thanks
How do I lien a customer for non payment..It is close to the 45 day mark and I’m getting stressed with the customer saying he will call me back or his secretary saying he is not in when his high end car is sitting the parking lot..Why is it only rich people that don’t pay their bills? I have worked with many middle class and even some that could not afford but the made it work and happily paid their bill.
Hi. I hired a contractor to renovate my bathroom. Total gut, all new. The work is considerably sub-par, to the point that I am considering hiring someone else to rip out all of the tile, including the floor, and re-do it all. I with-held final payment from the contractor, as he did return to try to make it “right”, which included but was not limited to re-grouting some areas in the shower with a different coloured grout, and re-caulking some areas, etc. Honestly, it is really, really bad. Now he is threatening to put a lien on my house. I do not trust him to do any-more work. Should I just let him take me to court and show pictures of his shoddy work? Just not sure what to do…I feel bad…but his work is just so bad. Is that my fault for hiring him in the first place?
I am a small contractor in Nova Scotia. A regular customer had a crisis. She had water damage in a condo she owned in Toronto. She needs to sell the Condo. She said it would take about 10 days. I agreed to drive with her to Toronto with a helper. It was agreed I would charge her $500 per day for myself and my helper. When we got there, instead of fixing water damage, we found her tenant had died and was not found for 3 weeks. The condo corporation had demolished the interior to get rid of the odour. It was an 18 day project of 12 hour days. When completed she only could pay me $3,000.
As a Nova Scotian, can I put a lien on her property in Ontario?
EXAMPLE A HANDICAP LIFT AND CONSTRUCTION –IF A GOVEMENT FUNDING AGENCY PAYS FOR THE PROJECT TO CONTRACTOR WHO RESPOSIBLITY FOR ITS PAYMENT TO CONTRACTORS.WHERE IN THE ACT IS IT MENTIONED ABOUT CROWN AND MINISTRY FUNDING . THEN CAN A THE CONTRACTOR HAVE A LIEN ON THE PROPERTY..
THANKS..
I had a quote for $2k to complete a landscaping job. The contractor then said it would be $3900 and I agreed. The job was supposed to include grading and sod
but the contractor only did the grading. I haven’t made any down payment and everything is verbal, and we disagree on what was committed. Any advice.
Yes, next time put everything on the paper and clearly define the work and the cost.
I am a contractor in Ontario, have very good repute in the town I work. I am trying to keep my story brief so please excuse my writing skills.
I took a Basement renovation job with reference of my friend, I sent them the quotation and schedule of payments (stage by stage) by email, they wanted some change, I revised it and resent it to the home owner. They verbally approved it. No written agreement was done!
Work started, Framing HVAC, Insulations, 5 new Windows, 1 Exterior door, Underground and above ground plumbing, electrical were completed and passed by the inspectors from the town. From the very first payment they were a bit hesitant mentioning they are investing in their new trucking company, and have to buy new trucks to add to their fleet,but they will have money to pay us at the end of the project. I told them we can’t work like this, and better to stop the work for now till you arrange the cash flow for the project
They kept appreciating the work and requested us not to stop and they will pay us the money after completion of the next stage (Drywall), We did it.
Once again they couldn’t pay the money saying they will be able to do that after the next stage. I picked up my stuff and left. They owe me 9500. I sent them a text after 2,3 days that if they will not pay me, i will start the next job in line, and they will be responsible for the delay, and I will put lien on their property to recover my hard earned money.
After one day I got a call from the detective that a complaint has been lodged against me that I have stolen 6k from the bedroom of the homeowners. I was shocked, went straight to the police station, told him the whole situation. He reported in my favor. I never had these kind of customers before, never wanted to put a lien, but after their complaint now I want to pursue it.
The customer couldn’t accuse that the work wasn’t up to the mark because the city inspectors were there to inspect the quality of work.
The customer couldn’t say that the contractor took more money and didn’t complete the job because we signed the paper as we collected money .
The customer couldn’t complaint that the work was lingered on and the contractor delayed the project because it went as per schedule.
I never had these kind of customers before, never wanted to put a lien, but after their complaint now I want to pursue it.
You look like a good renovator. If you don’t mind, I’d like to have your contact in case we need your help. My email ysgww@yahoo.com.
Yes, I hope you have placed a lien on the title
I provided a purchase order to someone for a job. He ultimately never signed the purchase order back but indicated via email that he would do the job. It needed to be done by a Wednesday. After asking him if he could do it on a Tuesday via email, he did not respond. I called his office 3 times over 2 days and he did not respond then was told he was unavailable.
On the Tuesday, day before the deadline, I scrambled to find another company to complete the job which they did.
This first person is now telling me that I owe them for the job they would have done and they are going to put a lien on the job if I don’t pay the entire amount.
My question is – can they put a lien on the job if they never actually did anything?
No.
We hired a contractor to renovate our entire basement. He had some kind of ongoing dispute with his plumber, and upon completion of the project, there was a major leak behind the wall in the shower. Now, the grout is cracking in the sill and pan, as I assume the 2 X 4’s are swelling due to being saturated with water. I have kept my 10% holdback, but after soliciting several plumbers to estimate repair costs, they are all much more than my holdback. Now…. a sub-contractor who I never even met, nor spoke to, but who installed a countertop in the laundry room is demanding payment, as the contractor has not paid him. Our contracgtor has told him that he can’t afford to pay, due to our holdback. Can the counter installer place a lien on our property?? The installation of the countertop is clearly spelled out in the contract to be completed by our contractor.
The short answer is yes. Anyone that supplies work or material can place a lien for not getting paid. However, your comment raises a question. Does the agreement spell out that all the work will be done by your general? Does it say that he/she will not subcontract any portion of the work?
If it does, you may have a way out. Please consult a lawyer.
As far as your leak repair costs are concerned, I doubt it can be that much. It does not cost much to cut out a piece of drywall and do a repair on plumbing pipes. Any handyman can do it. I am sure that 2x4s will dry out as soon as the leak is fixed.
We hired a contractor for doing a full renovation worth 200K. But since the begining the contractor was not doing enough work to finish the project which he promised to finish within 2 – 3 months. He didn’t had enough people to work on that project.
But has was behind us whenever the payment dates occurs and we paid more than 60% for doing around 25% work. That means we paid as per the contract and we were supposed to give the last amount after the completeion of contract. But he was looking for more money, which we cannot give becuase he wasn’t doing any work.
After waiting for long 5 months we let him go, that’s what he was looking for. But now the kitchen supplier, electrician, plumber everybody is behind us for money and somebody put a lien in our property. This is unfair, because how do we know whether the contractor paid them already or not. If the law is favourable to them , then anybody can do these kind of cheating. Is there any way we can put a lien on contractor’s property for not finishing the project and eloping with our money?
Wow! Sorry for your troubles. Contractors like that give us all a bad name. This should be a warning to everyone to use due diligence when choosing someone to work on their home.
You may check who and when put a lien on your property by checking with land registry office in your area. I doubt that anyone is “cheeting” as they would not go through the extra expenses by placing a lien. Lien has to be “perfected” and is void after 2 years unless the “Statement of Claim” is filled. For that, you need a lawyer and some more extra expenses.
And no, you can not put a lien on his property.
Thanks. There must be some law to protect these kind of false leins to harass homeowners? How does law protect homeowners against these pressure tactics? Where can owner present his/her arguments that don’t owe anything to contractor? What documents are required to be presented by contractor to prove his/her point (perfecting the lein)?
My son is a concrete foundation contractor and is building his own home in Ontario. He had to finance the construction. He does a lot of the work himself and buys most of the materials. He’ll hire friends when he needs labour. He’s only needed three contractors, for excavation and septic, for the well and for the countertops. He’s finished except for the exterior which he’ll do.
When the mortgage company makes a progress payment, 10% is held by my son’s lawyer presumably as a lien holdback. Nothing has been paid out and the balance is now $30,000. The liens have all expired. When can my son claim the holdback held in trust by his lawyer and how does he do that?
Thank you.
I have just got a construction lien against my home. The contractor didn’t complete the job and I have recorded conversation of him stating that he didn’t finish the project and yet he put a lien in my home. I also have text messages that he knows that his work failed. Was he legally able to put a lien on my home??
Yes, anyone who worked on your house can technically put a lien in a case of non-payment.
I did about 3000.00 dollars worth of painting, caulking and filling at a cottage for a individual who owns a business in the area that I live. After hearing from another contractor that this individual would not pay him the full invoices amount (less than half actually), I spoke with the owner and he has strong intentions to do the same to me.
Can I place alien on both the property and his business or just the property?
I am not a lawyer, but to the best of my knowledge, you can place the lien just on the property you worked on.
Thanks for sharing Information. Nowadays it is necessary for every laborer to be aware of construction lien act to get rid of injustice. Again thanks!!
How would the home owner know if a lien is placed by contractor? This is required so home owner can present his case and defend? If the contractor doesn’t inform the home owner of lien, would the court of any other body inform owner, so owner can defend in cases of false construction lien used as pressure tactics.
How can I find out if a contractor has placed a lien against my home?
Call your lawyer (or do it yourself) to see if your title is clear.
A subcontractor did not finish his job on our renovation job completely. Therefor we agreed with the General contractor to withhold approx. 20% of his final invoice, which included the entire scope of work + extras (which nobody had agreed on before). After a back and forth between the GC and the sub the sub registered a lien against our property. As to my understanding the sub now has to perfect his lien. Could you please let me know if there is a hearing or how we can fight this lien? The sub still doesn’t want to remedy the deficiencies and we will have to pay somebody else to do so.
There is no hearing to perfect the lien. However, shouldn’t your general contractor deal with this? After all, he hired the sub to do a job.
Is there a direct correlation between a 10% hold back and the 45 day lien period? I understood the 10% hold back is good for 30 day after substantial completion of which the rectifier of the job will put a value of outstanding items and the rest paid. The 45 days is the time period to register a lien for subs, suppliers and contractor. Two different things.
Hello,
My friend is a subcontractor doing the plumbing for a big project and his contract with the contractor has a fixed price with 5 milestone payments plus initial 15% on signing of contract. His team has completed 4 milestones with proof of completion but had been paid nothing. The 5th milestone still uncompleted but his has no money.Can he register the lien against the property for the 4 milestones he already completed? Thank you so much for your help!
I do not know about their contract, but yes.
Hello, does the ownership of construction material belong to the homeowner the moment the construction materials have been delivered to the home?
In the case of a contract fall-out, and the contractor decides to leave the project, is it permissible/lawful for the contractor to enter the homeowner property and take back the delivered construction materials without expressed permission from the homeowners?
The agreement should have a clause about the ownership of materials. Something like: ” The Cost of the Work shall include:
1. Costs of materials incorporated in the Project, including transportation and deposits for advanced ordering. All materials shall become the Owner’s property at delivery. At the completion of the Work, any amounts realized from material returns shall be credited to the Owner as a deduction from the Cost of the Work.
My contractor didn’t finish the job and made errors, in the end we agreed I would pay him $100.
Twice now he has refused the payment. First he refused an e-transfer and 2nd he refused to sign a conditions agreement to drop the legal pursuits including liens.
Can you put a lien for $100 even when the client has tried to pay, TWICE?
Hi,
Can a contract be offered substantial when there is a construction lien on the job?
Can a contractor put a lien on our property even if the funds are garranteed and sitting there in trust just waiting for Lawyer to check if there are any liens from subcontractors??? Ontario.
How long can a lien remain in your home? We have been in litigation for almost 3 years and the contractor does not have a leg to stand on. We fired him after him taking excessive time to complete a job not to mention his negligence and lack of duty if care. We’ve been through discoveries and its evident he’s lying and was assigned 8 pages of undertakings which he has not submitted yet he’s not yet dropped the case. The lawyers are sucking us dry and I don’t know how much longer we can continue to pay. 😓😓
I did a job for a home owners son. Dug out soil and installed 50 tonne of a gravel and drainage around outside. He just asked me come and do it didn’t ask for quotes. The way he acted money was no object. He said if we need more material just get it. When I text him amounts after first day of work. He text me back and said he was shocked and didn’t want to pay that much. Not sure what to do. The amount owing is $3200
So here is my issue a so called friend of mine talked me into doing a house with him..He was to supply all the material and i was to supply the labour..While I was to do the work I was to live in the said house cover the mortgage and bills each month while doing the renovations as well as work my reg 12 hours a day straight nights job. Then when the house was done we were to sell it and split the profits.Now that the house is with in two weeks of finishing he has put it up for sale..The problem is now he is not willing to slip any of the profits with me after I have done all the work as well as pay the mortgage and bills for the last 16 months..What can I do as he is trying to sell the house before I can do anything..
Call your lawyer ASAP.
House next to me is under construction. Total gut job. They have also Jack hammered the basement perimeter to install a weeping tile system.This house has always leaned back from the front with a twist to the side.
This house used to graze my upstairs bathroom peak however since construction it is now crushing my shingles on this peak. There have been no permits obtained and the city has put up a cease work until permits are obtained. My question is how do I protect myself and my property to be sure the lean is addressed.
Thanks Donna
I was hired by a company as a sub contractor and didn’t get my pay. It is over 45 days since that and I can’t find the contractor. Can I still put a lien on the property I worked on?
Unfortunately, no. However, you have other legal means. Talk to a lawyer.
Ihi there, I did some interior water damage repairs on ceiling primed and painted and refinished stairs samded and 3 coats varsthanefor a couple in order for them to put house on the market , i have called them and phone was didconnected , left cards on door to plesae call me to no avail I had an agreement signed to be paid when house was sold . I noticed there is a sold sign on there property almost a year later but nobody has contacted me still even after keaving a note, can I lein it still if drop off updated invoice ? All material and labour I supplied to help them so they could even list it ?? Thank you for your time
I purchased a house in May 2018 in Cornwall, ON – a lien search was conducted and it was clear.
It turns out that previous owner (in his 80’s) had signed a contract with Ontario Energy Group for an AC unit (yes OEG is under investigation for illegal business practices) and did not disclose contract (apparently he continued to pay the bill until Sep 2019).
Now I am being harassed for payment (now at ($800+) and I have confirmed that OEG placed a lien on my property in Sep 2019 (4 years after the AC unit was installed).
Is this legal? What are my rights? They want a ridiculous amount ($14K) for a 4 year old AC Unit!!!
Thanks in advance for help.
Cheers!
Bob
I have a renovation contract with a general contractor who decided to subcontract some of the work. I was never involved in the negotiations with the subcontractors nor consulted and was never made aware of the identity of the subcontractors nor of the value of their contracts. Today, I have received a notice from a lawyer requiring payment in with 24hrs of an invoice from a subcontractor charging over $18,000 strictly for labour to install 900 sqft of radiant electric flooring. This is abusive charges and does not make sense as it is twice the value of the material ! How can I fight to prevent the registration of a lien on my property as I was not aware of the existence of such abusive charges? How can I prove that the last day of work of this subcontractor was December 16, 2019 – more than 45 days since completion of the subcontractor’s work – therefore a lien cannot be registered. Thank you for your help. Daniele
You need to contact your lawyer as soon as possible. I would like to have been of more help, however, I am a builder, not a lawyer and can’t give you legal advice. I just hope your contract is clearly written and you can prove your case.
I have a question I have hired a framer to frame a custom home
There’s about 9 days left for completion date of the entire project and he still hasn’t put on the plywood for the second floor
It’s states in the contract that second payment should be made upon completion of second floor but he Is now requesting that payment once he only puts up the plywood for the floor only no walls or anything so second floor is not complete with exterior walls neither interior walls
Also contract states the price is based on 3-4 framers working daily on the site most of the time he shows up by himself or with another guy but never showed up with 3 or 4 guys.
If I refuse to pay him until all the second floor is completed and we get into an argument and stops showing up can he still be able to put a lien on the property
I am the owner of a freehold Townhouse property in Newmarket Ontario.
My neighbors decided to change their roof shingles. After they consulted with me I told them I do not need to do this job because I already fixed them. After three months the roofers came by and change my roof. At that moment a third party tenant was residing in my property and he already mentioned the roofers that they should take permission from me but they neglect to do that.
They send me a bill and asked me to pay the bill. I refuse the payment.
They put a lien in my property and registered in the supreme court for about one and half years.Now I need to remove my mortgage from Blender to Alender due to lower interest.
My question is, did they have the right to register a lien on my property?
If not How can I remove the lien from my property?
I owned a commercial building and had work completed.
I had financed an HVAC system during this reno.
I unfortunately claimed BR in 2008 and received my discharged in 2009.
This finance company was included in the BR and did not dispute this in the 30 days after receiving notice.
Apparently finance company placed lien on my own residence, not at the location of renovations (which was sold in 2011) and it was well passed 45 days since service was completed. some payments were made.
I have never actually been contacted by Finance company about payment and I found out about lien when applying for a government program.
The original amount wad 15,000 .. It is now over 60k.
Is the lien valid when it stipulates incorrect information like address of work completed? If the BR notice was not responded to?
Can finance company seriously not try to collect or inform me of outstanding debt and simply wait (13 years now).
This company will not respond to any communication inquiring about lien. I am not certain if action with Ontario Courts was ever started as I didnt receive any documents or have not been forced to sell hone to pay lien.
Your help is appreciated.
I would contact a lawyer.
Contracts are essential to any business. While oral agreements are generally enforceable, written ones are easier to prove. Great contracts have a fair allocation of risks across all the parties, which helps mitigate the risk and reduce disputes. It should clearly define terms and conditions that protect all the parties.
You may also read my blog about Simple Steps for Preventing Construction Claims
Thank you.
We’re hired a contractor to do some floor works. There was no signed contract or agreement. We’ve been having issue with his work since the beginning. There has been a lot delays (almost 3x of the original estimate time) and quality of his work. We had to buy extra materials to fix some of the mistakes his people made. Finally, once again, his people had screwed up the last major piece of the work which now will cost us another $8k or more to redo. We have already paid 75% of the total and now he’s threaten to put a lien on our house if we don’t pay the last 25%. Funny thing was he has sent us an invoice showing more than double of the 25% in balance, even though he had texted me before with smaller amount. We had offered him multiple chances to fix the issue but each time the result is the same thing (highly doubt he even did much to fix it).
What should we do? Do I even need to care about his claim?
So my contractors have been harassing me every 3 weeks for money they want 95% now and yet there is still at least 20% left of work, imperfections and damages to our property that need to be done but in turn our contractor doesnt send workers until he is paid. He is now threatening a lien can he do this with only estimates and invoices and no actual signed contract or end date and cost
I planned to build a home with my (then) boyfriend acting as the unofficial site super. He is a cement mason and has some (limited) knowledge of engineering and helped with sourcing some materials as well. In short, i was providing the money and he was going to provide sweat equity. He had zero financial investment but put in a lot of time researching materials and costs. Turned out he had no real workforce behind him and was making ill-informed and costly decisions that caused a lot of tension between us. He did some (minimal) land prep, for which he was paid in full. I ultimately ended the relationship (5 months ago now) and ended up contracting a professional builder to carry out the job. He is now saying he plans to lien the property because it was supposed to be HIS job and he is entitled to a piece of the equity.
He and I do not have any written agreement, nor has he invested a penny. Can he delay the build with this (in my opinion) frivolous and spiteful decision?
Thanks for the article! Simple question:
Does a lien accrue interest over time? (So, if a lien was placed for $20k in 2021 and the property owner sells in 2031, will that lien still be worth $20k or will the lien have accrued interest in the decade since filing it?)
Thanks for any insight you have!
Hi there u recently did a job I sub contracted off a siding company. We completed 2/3 of job and then another team finished the rest. The company owner is refusing to pay us for our work. I have lots of proof we did the work. Can I put a lien on this home.
Can a Construction Lien be placed on a property that is a Matrimonial Home,
owned by both husband and wife-
(protected under the Family Law Act section 21)-
WITHOUT a spouse’s signature on the contract too?
Hi! I’m confused, some websites say 45 days to file, some say 60? Which is it?
Full transparency should be mandatory. No-one should be able to place a lien on a property without the owners knowledge. How can this be enforced?
We have hired a contractor to for our basement the project is about $80,000. We are providing the payments as outlined in the contract. Within the contract it does not indicate to withhold 10%. Should we consider doing this? Also there are sub-contractors that are being managed and paid by the contracting company. If we pay the company we have a contract with and in ture they do not pay the sub-contractors they have hired to complete the work; can the subcontractors put a lien on our home?
Thank you