Across Canada, the construction lien process is fraught with
challenges. For property owners, contractors and trades,
construction liens can lead to project delays, reputational damage,
unhappy customers, or worse – unhappy
creditors. Fortunately, by clearly understanding the lien
lifecycle and timeline, the process is navigable.
What is a construction lien and who can claim one?
A construction lien is a security interest available to
contractors, subcontractors, workers, architects, engineers, and
material suppliers who have not been paid for their part in the
"improvement." A construction lien applies to any
interest the property owner has in the improvement, as well as the
improvement itself, the land on which the improvement is located,
and to any material delivered to the improved premises. The exact
quantum of the lien is typically limited to no more than the exact
amount owing to the lien claimant for their services or
What timeframe should I be aware of?
Construction lien rights arise as soon as work is performed on
an improvement, and/or when any materials or supplies are delivered
to the improved premises.
To be enforced (in most jurisdictions), a construction lien must
first be registered, or preserved, which is usually done by filing
a claim for lien using a standard form at the appropriate Registry
Office. Timelines to register a construction lien
("construction hypothec" in Quebec) can range anywhere
from 30-45 days depending on the province and type of improvement.
Typically, the time limit for registering a lien claim starts from
the earliest of: (1) the issuance of a certificate of completion of
an improvement; (2) the actual completion of an improvement; (3)
the abandonment of an improvement (4) the final supply of material
or services to the improved premises; or (5) termination of the
Once the lien is preserved, it must then be perfected, which
usually requires an action to enforce the lien being commenced and
registered against the title of the improved premises. Most
liens will expire if not perfected within a set timeframe, so it is
imperative to "watch the clock".
How do I get rid of a construction lien on my property?
There is no substitute for ensuring you are contracting with
solvent, reputable builders. However, problems can still arise
and it is important to understand how best to deal with
In addition to statutory "holdback" provisions, there
are many ways to vacate or discharge a lien from title. These
methods include executing a release (or application for
cancellation) for the lien in the prescribed form and registering
it on title, paying all or some of the claimed amount into Court,
posting security for the amount in the form of a bond or letter of
credit, plus a portion for costs, or posting the amount in a trust
account of one of the parties' legal counsel to be held and
invested and eventually distributed in accordance with mutually
agreed terms and/or undertakings. The Court can also order the
discharge of a lien from title, where the parties obtain an order
of the Court declaring the lien was invalid.
Finally, the best way to deal with liens is to avoid them!
Follow up with your development team in the early stages of your
project and communicate expectations clearly with contractors and
subcontractors. Review tender documents, instructions, and contract
documents to ensure there are no clauses that could impact holdback
amount or time of payment. Consider setting up a meeting of
all stakeholders prior to construction to understand each
other's timetables, schedules and special needs –
this should help identify and deal with conflicts before they
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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