Are you a contractor in Ontario?
Do you have an outstanding invoice or a few outstanding invoices—and you want to recover them quickly?
If so, you’ll want to register a construction lien with a lawyer.
It’s the quickest and easiest way to ensure that your rights are protected and that you’ll be paid for the hard work you’ve done for your clients.
What Is a Construction Lien?
The construction business can be tough.
Not only does it take a strong work ethic and problem-solving skills, but it also requires dedication to the not-so-fun business tasks—like dealing with unpaid invoices.
When you perform work on a property, you have the right to get paid for your work. But, sometimes invoices don’t get paid, whether by mistake, due to insufficient funds, or on purpose.
But, even if an invoice doesn’t get paid—it doesn’t mean you’re out of luck, thanks to construction liens.
If a client leaves you empty-handed, you can file a construction lien to ensure you get the money owed to you for a job.
A lien is a record that you can put on a property you’ve worked on. This means any sale proceeds of the property (asset) may go to you, the lien holder.
A construction lien gives you a legal claim on the land and property you worked on. This is similar to a bank’s position with mortgages when it loans out money.
Simply put, with a construction lien, if your client doesn’t pay you—you can claim a stake in the asset you helped create. This means any money you invested through materials and labour into a job will be held in the property under your name.
If you aren’t paid for your work on a property, you can seek court approval to sell the property to collect on the debt.
More often than not, the owner of the property will seek to relieve themselves of the lien you place on their property, since any properties with liens on them come with a variety of inconveniences. One of these issues is that they’re very difficult to sell.
This means the property owners will try to reach a settlement with the lien holder, so you’re paid what you’re owed and the lien is removed.
If you haven’t been paid on a job, you’ll want to file a construction lien to guarantee you’ll be paid for your hard work.
How Do You Register a Construction Lien in Ontario?
You may be wondering… Do you need a lawyer to file a construction lien?
The short answer is, yes. A construction lien is a legal filing, which means you’ll need a lawyer to set it up for you.
There are a few steps you need to take establish a construction lien:
You need to make sure you register a lien within 60 days since the date your work contract is completed or abandoned, among other requirements.
How exactly you register your lien depends on whether or not the lien is attached to real estate.
If it is, you need the help of a lawyer to register the lien with the appropriate land registry office.
If it’s not, then you can preserve your loan by giving a copy of the claim to the property owner, which is the case with certain Crown or government lands.
What Information Do You Have to Include in the Lien?
When you file, you’ll need to include certain information:
- Description of services provided
- Description of materials provided
- The amount claimed
- Description of the property on the lien
Once your lien is preserved, you need to perfect it within a strict timeline. This means you’ll need to file a statement of claim with the court. In this statement, you’ll request a remedy which is most often for the owner to sell the property in question so the owner can pay their debts back to you.
When a lien attaches to a piece of real estate, once the lienholder files a claim and registers a certificate of action with the land registry office, the lien is perfected.
Are There Time Limits to Register a Construction Lien?
Under the Ontario Construction Act, there are certain time limits you need to follow:
Contractors:
The lien must be filed within 60 days after the earliest of the following:
1. The publication of the Certificate of Substantial Performance;
2. Completion of the Contract; or
3. Abandonment of the Contract.
Subcontractors (or Suppliers):
The lien must be filed within 60 days after the earliest of the following:
1. The publication of the Certificate of Substantial Performance;
2. The date when the supplier or subcontractor last performed services or supplied materials; or
3. The date when the subcontract is certified to be completed.
Once the construction lien is filed, in order to keep it alive, you’ll need to start a lawsuit in Ontario and register a Certificate of Action against the title to the property. This must be done within 90 days from the last possible date to register a lien.
If the lawsuit isn’t commenced—and the Certificate of Action isn’t recorded within the time limit, the lien may be removed or discharged. This means you, as the lien claimant will lose the benefit of the lien.
Need Help Filing Your Ontario Construction Lien?
If you want help getting paid for the job you’ve done, then you need to file a construction lien as soon as possible. For help with your filing, or if you have any questions about the lien process, reach out to us at Falcon Law.
Right now, we’re offering free consultations for construction liens in Ontario.
Click here to book a consultation today.
