A construction lien is a claim made against a property by a contractor or subcontractor who has not been paid for work done on that property. A construction lien makes it difficult or impossible to sell or refinance a property because it makes its title encumbered.

Any person who supplies services or materials to an improvement has a lien upon the premises that were improved for an amount equal to the price of the services or materials. As long as services or materials were provided, it does not matter if the services or materials were provided directly to the owner, to a contractor or to a subcontractor. The law governing construction liens in Ontario is the Ontario Lien Act.

Did you know…among the amendments to the Ontario Lien Act are two major changes.

Firstly, for contractors working in new condominium projects, there is now protection in place allowing liens to be placed on an entire development before it is registered. Condo developers and builders must now post a Notice of Intention to Register a Condominium in a construction trade newspaper five to fifteen days before sending the package description to the municipality where the condominium is located. Previously, contractors who were unpaid for work done could not place a lien on the whole project if the individual condo units became registered as separate legal parcels of real property.

Secondly, the Act now provides a better definition of the word “improvement.” Previously, contractors that installed equipment that might be considered portable, such as air conditioning units, could not place a lien on the property since the equipment was not considered an “improvement.” The Act now expressly includes the installation of industrial, mechanical, electrical, or other equipment on the land that is essential to the normal or intended use of the land.

The Ontario Lien Act is a very complex piece of legislation which sometimes has priority over all the other branches of law. The Act has been and continues to be a constant source of difficulty. Contact our office to speak with one of our construction lien experts who will quickly answer all your questions.