Ontario's Construction Act (formerly the Construction Lien Act) directly affects every Ottawa homeowner who hires a contractor for renovation or construction work. Understanding your obligations under this act — particularly the holdback requirements — protects you from potentially paying twice for work already paid to your contractor. If a contractor does not pay their subcontractors or suppliers, those unpaid parties can place a lien on your property. This guide explains the Construction Act in plain language, covering holdback rules, lien timelines, your obligations, and how to protect your...
A construction lien is a legal claim against your property.
Anyone who supplies services or materials to improve your property can register a lien if they are not paid — even if you paid your general contractor in full. This means subcontractors, material suppliers, and equipment rental companies can all place liens on your home. A lien prevents you from sel...
The holdback is your primary protection under the Construction Act.
You are required to hold back 10 percent of every payment to your contractor. This holdback must be retained for 60 days after the work is substantially complete (or 60 days after the contract is completed for smaller projects). After 60 days with no liens registered, you release the holdback to the...
The Construction Act has strict timelines.
Lien registration — subcontractors and suppliers have 60 days from last day of work to register a lien. Lien perfection — a registered lien must be perfected (court action started) within 90 days. Holdback release — you can release the holdback 60 days after substantial completion if no liens are re...
Practical steps to minimize lien risk.
Always maintain the 10 percent holdback — it is not optional. Request statutory declarations from your contractor confirming all subcontractors and suppliers have been paid before releasing the holdback. Ask your contractor for a list of all subcontractors and major suppliers working on your project...
You must hold back 10 percent of every payment to your contractor for 60 days after substantial completion. This protects you from subcontractor and supplier liens.
Yes. Any worker or supplier who provides services or materials to your project can register a lien if they are not paid by the general contractor.
A lien must be registered within 60 days and perfected (court action) within 90 days. If not perfected, the lien expires and can be removed.
A lien prevents sale or refinancing until resolved. The holdback protects against paying twice. If you maintained the holdback properly, your maximum exposure is limited.
Yes, it is a legal requirement. If you pay the full amount and a lien is filed, you may be required to pay the lien amount in addition to what you already paid your contractor.