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Construction Lien Act In Ontario – 2026
Ontario – construction law
Liens + holdback + prompt payment
Updated for Jan 1, 2026
Construction Lien Act in Ontario: It Is Now the Construction Act (2026 Update)
Searching for the Construction Lien Act in Ontario? Here is the first thing to know: the Construction Lien Act was renamed the Construction Act back in 2018, and it has since grown to cover far more than liens – prompt payment, mandatory holdback, and a fast dispute-resolution system called adjudication. As of January 1, 2026, a fresh round of amendments (Bills 216 and 60) changed how holdback is released. If you are building a custom home or running a project in Ontario, these rules decide who gets paid, when, and what happens if they do not.
1Now the Construction Act
2Lien: 60 days / 90 days
310% holdback
4New 2026 holdback rules
Read this first – this is not legal advice. This page explains the Construction Act in plain language for homeowners and builders. Lien deadlines are strict and unforgiving, and the rules changed on January 1, 2026. If money is owed, a lien has been registered against your property, or a deadline is close, talk to an Ontario construction lawyer right away – a missed date can wipe out a valid claim.
“Construction Lien Act” or “Construction Act”? Both, kind of.
People still search for the “Construction Lien Act,” and that is fine – but the current name is the Construction Act. Ontario overhauled the old Construction Lien Act in two big waves: the 2018 changes modernized liens and holdback, and on October 1, 2019 the province added prompt payment and adjudication. The Act still governs construction liens – it just does a lot more now. If you are reading an older “Construction Lien Act 2025” article, the bones are the same, but the 2026 amendments below are what is current.
What a construction lien actually is
A construction lien is a legal claim registered against the title of a property by someone who supplied labour or materials to improve it and did not get paid. It is the law’s way of giving contractors, subcontractors, and suppliers security: if you improve someone’s land, you get a claim against that land until you are paid. For a homeowner, that means an unpaid subcontractor your general contractor never paid can register a lien against your home – even if you paid your contractor in full. That is exactly why the holdback and prompt-payment rules exist.
Who can file a lien: anyone who supplies services or materials to an improvement – general contractors, subcontractors, suppliers, and most trades and workers. Who generally cannot: architects and engineers can lien in many cases, but the rules are specific. The safest assumption as an owner is that anyone who worked on your project has potential lien rights.
The deadlines that decide everything
Construction liens live and die by two clocks. Miss either one and the lien is gone, no matter how much you are owed. Under the Construction Act (for contracts on or after October 1, 2019), the periods are longer than the old 45-day rule:
| Step | Deadline | What it means |
|---|---|---|
| Preserve | 60 days | Register the claim for lien on title. The clock runs from the earliest of publication of the notice of substantial performance, or the date the contract is completed, abandoned, or terminated. |
| Perfect | 90 days | After preserving, start a court action and register a certificate of action – within 90 days from the last day the lien could have been preserved. |
Rule of thumb: a preserved-but-not-perfected lien still expires. Both steps have to happen, in order, on time. The 2026 amendments did not shorten these lien timelines – an earlier proposal to make lien rights expire annually was removed before the rules came into force.
Holdback: the 10% that protects everyone
The Construction Act requires each payer to hold back 10% of the value of the work as it is done. That retained money – the statutory holdback – is a safety net: it stays available to pay lien claimants further down the chain if someone upstream does not pay. As an owner, holding back correctly is your main protection against paying twice.
What changed on January 1, 2026 (Bills 216 and 60): Ontario introduced a mandatory annual release of holdback. On projects lasting more than a year, the owner must publish a Notice of Annual Release of Holdback (the new Construction Act Form 6) within 14 days of each one-year anniversary of the contract, then release the accrued holdback after a set waiting period, unless a lien has been preserved or perfected. The goal is to stop holdback from being trapped for years on long projects. Importantly, the government kept the normal lien-expiry rules – holdback is now released annually, but your lien rights still run on the 60-day clock above.
Transition matters: the annual-release regime applies right away to contracts entered into after January 1, 2026. For contracts signed earlier, transition provisions in the Act set when the first annual release kicks in. On a big or long project, this is worth confirming with a construction lawyer.
Prompt payment: the 28-day rule
Since October 1, 2019, the Act forces money to move on a schedule instead of whenever it is convenient. It all starts with a proper invoice – an invoice that meets the specific requirements in the Act (and the 2026 amendments sharpened exactly what “proper” means).
Owner
Pay within 28 days
Once a contractor gives the owner a proper invoice, the owner has 28 days to pay – or must deliver a notice of non-payment within 14 days if they dispute it.
Contractor
Pay subs within 7 days
After the contractor is paid, they must pay their subcontractors within 7 days. The obligation cascades down the chain.
Dispute
Notice of non-payment
If a payer will not pay, they have to say so, in writing, on a strict timeline and with reasons – silence is not an option under the Act.
2026
Proper-invoice rules tightened
Bill 216 refined the definition of a proper invoice and the meaning of “price,” plus a deeming rule for invoices that do not strictly comply. Getting the invoice right is what starts the clock.
Adjudication: dispute resolution that does not wait for court
Also new since 2019, adjudication is a fast, interim-binding way to resolve payment disputes while the work continues. Instead of waiting years for a lawsuit, a party refers the dispute to an adjudicator who issues a decision on a tight timeline. The decision binds the parties on an interim basis (you can still litigate or arbitrate later), but in practice it gets people paid and keeps projects moving. The 2026 amendments made further administrative changes to the adjudication process.
Why builders and owners care: together, prompt payment and adjudication shifted the balance of power on Ontario job sites. Payment delays that used to drag on now carry real deadlines and a fast enforcement route – which is good for anyone who does the work and expects to be paid for it.
Building a custom home? How to protect yourself from liens
The nightmare scenario for a homeowner is simple: you pay your general contractor in full, the contractor fails to pay a subcontractor, and that sub registers a lien against your home. You could end up paying twice. Here is how owners stay protected:
1
Hold back the 10%
Actually retain the statutory holdback – do not pay it out early because the work looks done. It is your legal cushion against unpaid subs.
2
Get lien-clearance evidence
Before releasing money, ask for a current title search and, where appropriate, statutory declarations that subs and suppliers have been paid.
3
Watch the substantial-performance date
Publication of substantial performance starts the lien clocks. Know when it happens – it controls when you can safely release holdback.
4
Hire a builder who runs it clean
A builder who documents payments, publishes the right notices, and manages holdback correctly is the cheapest lien insurance you can buy.
If a lien lands on your title: do not ignore it and do not panic-pay. Liens can be discharged or “vacated” by posting security into court, negotiated, or challenged if defective – but every route has deadlines. Get a construction lawyer involved immediately.
Building a custom home and want it run by the book? Work with a builder who manages contracts, holdback, and payments properly.
We design and build custom ICF homes across Simcoe County and Georgian Bay, foundation to finish, with clean contracts, proper holdback handling, and trades who get paid on time – which is exactly how you avoid lien headaches. Tell us about your build. No charge to ask.
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The Construction Act is one piece of running a build. These plans cover the permit, the inspections, and the whole budget so nothing blindsides you. Each $29.99, or both for $49.99.
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Ontario Construction Act: frequently asked questions
Is it the Construction Lien Act or the Construction Act?
It is the Construction Act. Ontario renamed the old Construction Lien Act as part of the 2018 reforms, and added prompt payment and adjudication on October 1, 2019. Many people still call it the “lien act,” and it does still govern liens – but the current, correct name is the Construction Act, most recently amended effective January 1, 2026.
How long do I have to file a construction lien in Ontario?
You must preserve the lien within 60 days (register a claim for lien on title), then perfect it within 90 days (start a court action and register a certificate of action). The 60-day clock generally runs from the earliest of publication of the notice of substantial performance, or the date the contract is completed, abandoned, or terminated. Both steps are mandatory and the deadlines are strict – a missed date usually ends the claim.
Can a subcontractor lien my house if I already paid my contractor?
Yes, that is exactly the risk the Act is built around. A subcontractor or supplier who improved your property and was not paid can register a lien against your title even if you paid your general contractor in full. Your protection is to retain the 10% statutory holdback, get evidence that subs have been paid before releasing money, and work with a builder who documents everything.
What is the 10% holdback?
The Construction Act requires each payer to hold back 10% of the value of the work as it is done. That retained money stays available to pay lien claimants down the chain if someone upstream fails to pay. As of January 1, 2026, owners on longer projects must also release holdback on a mandatory annual basis by publishing a Notice of Annual Release of Holdback (Form 6).
What changed in the Construction Act on January 1, 2026?
Bills 216 and 60 brought in a mandatory annual release of holdback (with a new Form 6 notice), refined the definition of a proper invoice and of “price,” and made administrative changes to adjudication. An earlier proposal to make lien rights expire annually was removed, so the normal 60-day lien-expiry rules still apply. The changes apply to improvements as of January 1, 2026, subject to transition provisions for contracts signed earlier.
What is prompt payment and the 28-day rule?
Prompt payment forces money to move on a schedule. Once an owner receives a proper invoice from the contractor, the owner must pay within 28 days or deliver a notice of non-payment within 14 days. After the contractor is paid, they must pay their subcontractors within 7 days, and the obligation cascades down the chain. It has applied since October 1, 2019.
What is adjudication?
Adjudication is a fast, interim-binding dispute-resolution process introduced in 2019. Rather than waiting years for court, a party refers a payment dispute to an adjudicator who decides on a tight timeline. The decision binds the parties for now (you can still litigate or arbitrate later) but in practice it keeps cash flowing and projects moving.
How do I remove a lien from my property?
A lien can be discharged if the claim is paid or settled, “vacated” by posting security (usually the lien amount plus a costs allowance) into court so the title is cleared while the dispute continues, or challenged if it is defective or out of time. Each route has deadlines and procedures, so get an Ontario construction lawyer involved as soon as a lien appears – do not ignore it and do not simply pay a disputed amount without advice.
Do I need a lawyer?
For anything involving actual money owed, a registered lien, or a looming deadline: yes. Lien timelines are unforgiving and the 2026 changes add new steps. This page is educational and general – a construction lawyer can apply the Act to your specific contract and dates, which is what actually protects you.
Not legal advice. This article is a plain-language overview of the Ontario Construction Act as amended to January 1, 2026, for general information only. It is not legal advice and may not reflect your specific situation or the latest changes. Always confirm current requirements and deadlines with a qualified Ontario construction lawyer. Official text: Construction Act (Ontario.ca).
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