Liens, loans, and liabilities…
As a homeowner, you’ve probably heard of the term “lien” before. But… you’re probably wondering what exactly it means?
What is a lien? How does it work? And who can put a lien on your property in Ontario?
As a homeowner, you may be wondering how liens in Ontario work. The truth is, while a lien can be put on your home, there are some requirements. And… not everyone can put one on.
In this quick article, we’ll show you what a lien is and who can put one on your property in Ontario.
Let’s dive in.
What Is a Lien on a Property in Ontario?
While the term may elicit some feelings of confusion, a lien is actually a simple concept.
A lien is a legal right or a claim against an asset or group of assets that act as collateral to satisfy a debt.
If you owe any kind of debt, someone may place a lien on your Ontario property. This is especially true if the debt is associated with your home in any way.
Technically speaking, the moment you took out a mortgage on your home, you had a lien placed on your home since a mortgage is a debt directly associated with your home.
Until you completely pay off your mortgage, the bank could seize your house as a form of collateral if you default on your mortgage.
The same goes with a HELOC, or home equity line of credit.
In Ontario, a lien claim can be put on any property you have–whether it’s your own home, an investment property, or commercial property.
Who Can Put a Lien on Your Ontario Property?
In the province of Ontario, there is the Construction Act.
This law allows anyone who supplies service or materials to put a lien on a property. This means anyone who is involved in any part of the building process – whether supplier, contractor, or subcontractor – may place a lien on the property at hand.
There’s one exception to this law, and that is if the owner is the provincial or federal crown.
Generally speaking, 60 days after completion of a contract, abandonment, or Certification of Substantial Performance (CSP), a contractor may be entitled to file a lien against the property. A supplier or subcontractor can do the same once the subcontract is finished or they’ve filed their CSP.
Can the CRA Put a Lien on Your Property in Ontario?
If you owe money to the Canadian federal government, then you may be at risk of having a lien put on your property.
The Canadian Revenue Agency (CRA) has plenty of power and can put liens on properties as part of their collections process.
They can do this if you fail to make tax payments–whether personal or professional business taxes.
Sometimes, you may not even know there is a lien on your home until you attempt to sell it. However, there are registries you can search in to check if there are any liens against your property.
Can You Sell a House With a Lien on It in Ontario?
Are you looking to sell your house in Ontario but you have a lien on it?
Well, unfortunately, you can not sell your house until the lien placed on your home has been dealt with.
If you’re trying to sell your house and then discover there’s a lien on it, you’ll have to figure out a way to settle the debt with the creditor before you can officially sell the home.
If you have a lien against your Ontario property and you’re looking to get it cleared, or you want to ask any legal questions about a lien on your home then reach out to us at Falcon Law.