Ontario Construction Act lien rights give contractors (and subcontractors) the legal right to register a claim against your home for unpaid work. Even if you've paid your GC in full, subcontractors with unpaid invoices can lien YOUR property. Here's how to protect yourself.
When a contractor or sub provides work or materials to your property, they have a statutory lien right against the property for the value of unpaid work. The lien gives them the right to force a sale of your home (rare but possible) to satisfy the debt. Lien must be: registered within 60 days of last work supplied, and perfected (lawsuit started) within 90 days of registration. Once registered, a lien clouds your title — you can't sell or refinance until it's resolved.
For any project over $50,000 in Ontario, the homeowner is required by law to hold back 10% of each progress payment to the contractor for 45 days post-completion. This holdback funds any subcontractor lien claims. After 45 days with no liens registered, you release the holdback to the GC. Failing to...
(1) Always hold back 10% on $50K+ projects (mandatory). (2) Request lien waivers from each subcontractor before final GC payment (Construction Act allows you to require this). (3) Pay GC by cheque with subcontractors named as co-payees on large draws (controls sub payment). (4) Maintain a list of al...
(1) Don't ignore — contact a construction lawyer immediately ($500-$2,000 initial consultation). (2) Verify lien validity (60-day filing window from last work). (3) Identify lien claimant and the underlying debt. (4) If you've paid GC properly with 10% holdback maintained, the GC should resolve. (5) If GC has financially failed, you may need to pay the sub directly from holdback. (6) If lien is invalid (filed late, no work actually performed), challenge it in court. (7) Lien can be vacated by po...
Last day of work (or supply) → 60 days to register lien. Lien registration → 90 days to start lawsuit (or lien expires automatically). Substantial completion → 45-day holdback period starts. Holdback release → if no liens registered after 45 days, holdback released to GC. Total maximum lien exposure...
(1) GC financially fails mid-project — subs lien for unpaid invoices. Your protection: 10% holdback (already in your hands). (2) GC paid you correctly but doesn't pay subs — subs lien your home. Your protection: lien waivers from subs before final payment. (3) Disputed work quality — GC liens you fo...
Lien rights extend well beyond your general contractor. Any party that supplies labour or materials to improve your property can register a lien: the GC, every subcontractor, sole-trade workers, equipment renters, and material suppliers — even if you've never met them and have no contract with them. This is why paying your GC in full does not, by itself, protect you. If the GC fails to pay a flooring supplier or an electrician's company, that party can still lien your title for the unpaid amount...
Ontario lien law deliberately ignores 'privity of contract' — you can owe a stranger's lien simply because they worked on your home through your contractor. The holdback and lien waivers exist precisely to manage this risk.
The best lien defence is built into the contract before work starts. Require: a complete, updated list of every subcontractor and supplier on the job; signed lien waivers (statutory declarations) from each before releasing the corresponding draw; proof of WSIB and insurance for every sub; and the mandatory 10% holdback on projects over $50,000, kept in a separate account. For larger draws, consider issuing cheques jointly to the GC and a key supplier to ensure the money reaches the party with li...
Keep dated copies of every payment, invoice, and waiver. If a lien is ever registered, this documentation is what lets your lawyer resolve it quickly and cheaply.
If you receive a Claim for Lien or a written notice of lien, act immediately — the clock matters. First, do not pay the claimant directly without advice. Second, contact a construction lawyer; an initial consultation runs $500-$2,000 and is worth it. Third, verify the lien's validity: confirm it was registered within 60 days of the claimant's last work and that the work was actually performed. Fourth, notify your GC in writing and demand they resolve it if you've paid properly and kept the holdb...
A registered lien clouds your title — you cannot sell or refinance until it's discharged or vacated. Ignoring the 90-day perfection window won't make it disappear; addressing it promptly limits legal cost.
There are several ways to clear a lien from title. If it's paid or resolved, the claimant signs a discharge. If you dispute it but need clean title to sell or refinance, your lawyer can 'vacate' the lien by posting security into court (typically the lien amount plus 25% for costs), which removes it from title while the dispute continues. An invalid lien — filed late or for work never done — can be challenged and discharged by court order. Each route has strict timelines and forms.
Vacating by posting security is not the same as admitting the debt; it simply unfreezes your property so a sale or refinance can close while the merits are decided.
The mandatory 10% holdback applies to projects over $50,000, but lien rights themselves exist on projects of any size. On a $20,000 kitchen, a subcontractor can still lien your home. Even without a statutory holdback requirement, it's smart to retain 5-10% for 30-45 days and to collect lien waivers ...
Treat a self-imposed holdback on smaller jobs as cheap insurance — it costs nothing and preserves leverage for deficiencies and unpaid-sub risk.
A legal claim by a contractor or subcontractor against your property for unpaid work or materials. Lien clouds your title and can force a sale (rare). In Ontario, lien must be registered within 60 days of last work and perfected (lawsuit started) within 90 days of registration.
Yes — Ontario law protects subcontractor lien rights regardless of your payment to the GC. This is why the 10% holdback and sub lien waivers matter so much. Without these protections, you could pay twice for the same work.
Mandatory under Ontario Construction Act for projects over $50,000 — homeowner holds back 10% of each progress payment for 45 days post-completion. This funds any subcontractor lien claims. Reputable Ottawa contractors expect and price-in this holdback.
Request from each subcontractor as a condition of final payment release to the GC. Standard form (one-page) signed by sub confirming they've been paid in full and waive lien rights for the project. GC coordinates collection; you require all waivers before releasing holdback.
Title is clouded; you can't sell or refinance until resolved. Contact construction lawyer immediately. Options: pay the lien claim from your holdback (if you maintained one), challenge invalid lien (filed late, no work performed), or post security in court to vacate lien while dispute resolves.