Construction Liens in Ontario — A Complete Guide
Ontario's Construction Act (formerly the Construction Lien Act) gives contractors, subcontractors, suppliers, and workers the right to place a lien on property if they have not been paid for work performed.
Who Can Register a Lien?
Any person who has supplied services or materials to an improvement of land in Ontario has lien rights, including:
- General contractors
- Subcontractors and sub-subcontractors
- Material suppliers (lumber, equipment, etc.)
- Workers (unpaid wages)
- Architects, engineers, and consultants
Critical Deadlines
| Action | Deadline |
|---|---|
| Preserve the lien (register on title) | 60 days from last supply of services or materials |
| Perfect the lien (commence court action) | 90 days from the date the lien was preserved |
| Set down for trial | Within 2 years of perfection |
How to Preserve a Lien
- Complete a Claim for Lien form (available from the court).
- Register it at the Land Registry Office for the county/region where the property is located.
- Within the same time period, serve a copy of the lien on the owner and (if applicable) the mortgagee.
Holdback Requirements
Ontario law requires owners to retain a 10% holdback from each payment made to the general contractor. This holdback fund is security for potential lien claims. An owner who fails to maintain proper holdbacks can be personally liable to lien claimants.
Trust Fund Provisions
The Construction Act establishes deemed trusts at every level of the payment chain. Money received by a contractor for the project must be held in trust for those below them in the chain (subcontractors, suppliers). Misappropriation of trust funds can result in personal liability even for corporate officers.
Vacating or Discharging a Lien
An owner can have a lien vacated by paying the lien amount into court as security. This allows the project to continue while the dispute is resolved.
Not getting paid for construction work? Protect your rights immediately.
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