Contractor Disputes in Ontario: Liens, Deposits & Going to Court
Contractor disputes are among the most common civil matters in Ontario. Whether a contractor abandoned the job, overcharged, or delivered defective work, you have legal options — including the Construction Act, Small Claims Court, and consumer protection law.
Your First Steps After a Dispute Arises
- Document everything immediately. Photograph all work (completed and defective), save all texts, emails, invoices, and contracts. Courts decide on evidence.
- Send a written demand. Before suing, send a formal demand letter by email and registered mail giving the contractor 10–14 days to remedy the deficiency or refund money owed.
- Do not pay the balance for incomplete or defective work. Withholding final payment is your strongest leverage.
- Get independent quotes to repair or complete the work. You will need these to prove your damages in court.
The Construction Act: Liens & Holdbacks
Ontario's Construction Act governs any improvement to land or a structure. Key provisions:
- Mandatory 10% holdback: Owners must hold back 10% of each payment to a contractor until the 45-day lien period expires after substantial performance. Never pay 100% upfront.
- Construction lien: An unpaid contractor, subcontractor, or supplier can register a lien against your property's title within 60 days of the last work or material supplied. A lien clouds your title and can prevent a sale or refinancing.
- Discharging a lien: You can pay the lien amount into court and have the lien vacated, or dispute it. A paralegal can help you respond or negotiate a discharge.
| Situation | Your Action | Deadline |
|---|---|---|
| Contractor registers a lien against your property | Preserve your rights — respond or pay into court | As soon as possible |
| You want to register a lien (as a contractor) | Register with Land Registry Office | 60 days from last work |
| Enforce a registered lien | Start a court action | Within 45 days of lien registration |
Consumer Protection Act (Residential Contracts)
If the work was done on your home and the contract is over $50 and was entered into at your residence (e.g., door-to-door or during a visit), the Consumer Protection Act, 2002 gives you:
- A right to a written contract for any work over $50
- A 10-day cooling off period for direct agreements (door-to-door sales or home solicitation)
- Rights against misrepresentation and unconscionable representations
Suing in Small Claims Court
For disputes up to $35,000, Small Claims Court is the most practical option:
- File a Plaintiff's Claim (Form 7A) at your local Small Claims Court
- Serve the contractor within 6 months of filing
- Attend a Settlement Conference before the trial date
- Bring photos, quotes, contracts, and all communications as evidence
- A licensed paralegal can represent you — often more cost-effective than hiring a lawyer
Claims over $35,000 go to Superior Court, where legal fees escalate significantly. In those cases, consult a lawyer about whether a negotiated settlement makes more sense.
Contractor Registered a Lien? Act Fast.
A lien on title is serious — it can prevent you from selling or refinancing your property. The contractor must start a court action within 45 days of preserving the lien, or you can apply to have it vacated. Do not ignore a registered lien. Contact Neo Legal immediately.
Dealing with a contractor dispute or construction lien?
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