Who Can Put a Lien on Your Property in Ontario? – Alarming Truth!

Who can file a lien on a property in Ontario?

In Ontario, several entities can place a lien on your property if you owe them money. This includes government organizations like the Canada Revenue Agency (CRA), which can enforce a tax lien for unpaid taxes. If you’ve defaulted on a loan, banks or other financial institutions may also file a lien to protect their financial interest. Even private individuals or businesses can take this step if you’ve owed them outstanding debts and they’ve obtained a court judgment.

The Construction Act allows construction companies, general contractors, subcontractors, and even laborer to place a builder’s lien on your home or land if they haven’t been compensated for their work, materials, or services. This applies to renovation or building projects. They must register the lien within 45 days of the Certificate of Substantial Performance (CSP) being issued or within 60 days of completion or abandonment of the project. In 2022 alone, over 2,500 construction liens were filed in Ontario, highlighting how common this is.

Other creditors can also complicate your financial management. For instance, a condo corporation can place a lien for past-due fees, fines, or special levies on your unit. Similarly, the municipal government can enforce a tax lien for unpaid property taxes from the last two years. In extreme cases, they can even force the sale of your property to recover the debt. With over 6,000 properties involved in the collections process annually, it’s crucial to stay on top of your financial obligations to avoid such complexity when selling or refinancing your house.

What Is a Lien on a Property in Ontario?

A lien is a legal claim placed on your property or asset when you owe money and fail to repay an unpaid debt. It gives the creditor the right to seize or sell your possession to satisfy the outstanding amount. For example, if you default on a mortgage, the lender can foreclose on your home to recover their investment. Similarly, a home equity line of credit (HELOC) is a secured form of financing that functions as a consensual lien, meaning you’ve consented to using your property as collateral. According to the Canadian Bankers Association, about 10% of homeowners face challenges with balance repayments, which can lead to serious financial troubles.

In Ontario, liens are regulated under laws like the Construction Act, which allows contractors, subcontractors, and material suppliers to place a claim if they haven’t been paid for their work, services, or materials. These construction liens must be filed within 45 days of the Certificate of Substantial Performance or abandonment of the contract. For instance, if a contractor completes significant work on your house but isn’t compensated, they can register a lien to cover their costs. Other entities, like the Canada Revenue Agency (CRA), can also place a lien for unpaid taxes, which can complicate selling or refinancing your property until the debt is completely paid.

Types of Property Liens

Construction Liens

For example, if you’ve had kitchen renovations completed but haven’t paid the contractor, they can register a lien to secure their payment. This ensures those who’ve contributed to your property’s improvement are entitled to receive payment.

Tax Liens

The Canada Revenue Agency (CRA) can place a tax lien on your property for unpaid taxes. If you owe more than 15,000 in back taxes, the CRA can enforce this secured interest, complicating refinancing or selling your property. In 2022, the CRA collected 500 million by targeting over 6,000 properties in Ontario. This type of lien is part of the collections process and can lead to serious financial troubles if not addressed promptly. It’s a powerful tool used by the government to ensure tax debts are recovered.

Judgment Liens

A judgment lien is issued by a court when a creditor wins a lawsuit against you. This legal hold ensures the amount owed is satisfied before any transactions on your property can proceed. For example, if you fail to pay a debt or damages awarded in a lawsuit, the affected party can register a judgment lien on your house. Annually, about 1,800 judgment liens are processed in Ontario, with amounts typically ranging from 5,000 to 100,000, depending on the debts or damages involved. This type of lien ensures creditors can recover what they are owed.

CRA Liens: How Unpaid Taxes Can Freeze Property Sales and What to Do

The CRA (Canada Revenue Agency) has the power to place a lien on your property—including your home, car, or boat—if you have unpaid taxes. As a federal government agency, they can register these liens through provincial registries, effectively freezing the title and blocking sales until the debt is settled. I’ve seen cases where clients attempted to sell their house only to find a lien appearing during a title search, forcing them to deduct the owed amount from the sale proceeds or risk the CRA seizing the money outright. Even business or rental assets aren’t safe—collections actions can extend to garnishing wages or bank accounts.

To avoid this, check registries ahead of any sale and act quickly if a lien is discovered. Licensed professionals like lawyers or insolvency trustees can help negotiate a payment arrangement or discuss debt resolution methods. In one instance, a client avoided asset seizure by forming a written agreement with the CRA, using sale proceeds to pay taxes owed. Never ignore CRA warnings—verbal promises won’t protect you. Always involve professionals to recover control of your property and financial situation.

Navigating the Sale of a Home with a Lien in Ontario

Selling a home with a lien in Ontario can be a difficult process, but it’s not impossible. A lien is a legal claim placed on your house by a creditor due to unpaid debt, such as a defaulted loan or unpaid taxes. When you attempt to sell, the lienholder must be paid from the proceeds of the sale before the transaction can close. If you discovered a lien during the title search, which delayed the settlement until they negotiated a payment arrangement with the lienholder. In some cases, the buyer may even back out if the financial responsibility isn’t clearly resolved.

To complete the sale with confidence, start by creating a plan to address the lien. This often involves negotiating with the lienholder to officially release the claim or deducting the balance from the sale proceeds at closing. In one instance, a client used their equity to pay off the lien before closing, ensuring a smooth transaction. Always involve a professional to deal with the lienholder and ensure the agreement is in writing. This approach not only protects the buyer but also helps you sell your home without unnecessary delays.

Resolving and Preventing Liens: A Proactive Approach

Dealing with a lien on your property in Ontario can feel overwhelming, but there are clear steps to resolve and prevent this financial burden. If a creditor places a lien due to unpaid debt, you can negotiate a payment agreement or installment plan with the lienholder to clear the balance. In one case, a client facing a Construction Act lien from a contractor worked with a real estate lawyer to file a motion and reach a settlement through mediation. For more severe situations, like bankruptcy or a consumer proposal, a Licensed Insolvency Trustee can help secure a stay of proceedings, halting legal action and providing debt relief. Always ensure compliance with tax payments to avoid Canadian Revenue Agency liens, as I’ve seen clients face enforcement actions due to hardship or poor communication.

To prevent liens, maintain accurate financial records and work with certified service providers who have strong credentials and references. For businesses, structured processes like contract management and monitoring deadlines can avoid disputes. In real estate, title insurance is a smart strategy to protect ownership from complications. I always advise clients to seek legal assistance from the Law Society of Ontario or the Ontario Bar Association for dispute resolution and compliance. By staying proactive, you can safeguard your financial future and avoid the stress of liens.

How to Check If a Lien Has Been Placed on Your Home in Ontario

If you're unsure whether a lien has been filed against your home, there are ways to check. In Ontario, you won’t always get a notification, especially if the individuals or organizations placing it bypass the courts. However, if it’s due to a court case, such as a judgment, you may already be aware. To search for a registered lien, you can use the OnLand web portal, which provides access to Ontario’s Land Registry for a small fee. The CRA or a builder might place a lien without direct information, so homeowners often only discover it when selling their property or dealing with a situation where they need to rebuild. Understanding this process and checking registries can help you stay informed about any claims on your property in Canada.

Understanding Lien Duration, Costs, and Deadlines in Ontario

In Ontario, a lien on your property can last indefinitely if not addressed, but specific rules depend on the type of lien. Under the Construction Lien Act, a builder’s lien must be filed within 60 days of completion or abandonment of a project. If the lienholder doesn’t take legal action within 90 days of registration, the lien expires and becomes worthless. I’ve seen cases where contractors missed these deadlines, losing their chance to recover money for labor or materials. In contrast, CRA liens stay on your title until the debt is paid off, even if the property is sold.

The cost of filing a lien in Ontario is $8.00, compared to $5.00 in British Columbia. However, you must meet regulatory requirements, such as sending a demand or information letter to the landlord or property owner. For public projects, like those on armed forces bases or public utilities, the rules are different, and holdbacks are often retained to ensure subcontractors are paid. Using a lien date calculator can help track deadlines and prevent losing your claim. Whether it’s a Federal Crown project or work on a municipal highway, knowing these rules is essential for protecting your property and financial interests.

Filing a Lien Under the Construction Act

Notice of Contract

When payment disputes arise, contractors, subcontractors, and suppliers issue a Notice of Contract to inform the property owner about unpaid services or materials provided for the project.

Registration of Lien

Claimants must register the lien with the Land Registry Office within 45 days of completing the work or supplying materials. In Ontario, most liens range from $1,000 to $50,000, depending on the scope of the project.

Providing Notice of Lien

After registering the lien, claimants must notify the property owner by providing a Notice of Lien. This step is essential to keep the lien valid and enforceable.

Enforcing the Lien

To enforce the lien, claimants must start legal action within 90 days of registration. If this deadline is missed, the lien becomes null and void, and the claimant loses the right to recover unpaid amounts.