A legal claim registered against a property's title for unpaid debts. Common types include construction liens (filed by contractors or suppliers for unpaid work), tax liens (for unpaid property taxes), and judgment liens (from court orders for unpaid debts). A lien must be satisfied or discharged before a property can be sold with clear title. In Ontario, construction liens must be registered within strict time limits under the Construction Act.
Why It Matters
A lien on a property you're buying is a serious red flag -- it means someone has a legal claim against it. Your real estate lawyer's title search should uncover any liens before closing. If a lien exists, the seller must clear it before the sale can proceed. Title insurance also provides protection against undiscovered liens.
Real-World Example
You are purchasing a home in Richmond Hill and your lawyer's title search reveals a $28,000 construction lien registered by a roofing contractor who claims the seller never paid for a roof replacement completed eight months ago. Your lawyer informs the seller that the lien must be cleared before closing. The seller disputes the amount but agrees to have $28,000 held in trust from the sale proceeds to resolve the lien. The transaction proceeds, and the lien is eventually settled for $24,000 from the held funds.
Ontario & GTA Context
Ontario's Construction Act governs construction liens (formerly called mechanics' liens). A contractor or supplier must register a construction lien within 60 days of the last day they supplied services or materials. Once registered, the lien has a 90-day window to be perfected by commencing a legal action, or it expires. Property tax liens take priority over most other liens and can result in the municipality selling the property to recover unpaid taxes. All liens must be cleared or insured over before a clean title can be transferred.
How It Works in Practice
Your real estate lawyer will conduct a title search before closing to identify any registered liens. If a lien is found, the seller must clear it -- either by paying it, having it discharged, or arranging for a holdback from the sale proceeds. Do not close without a clear title or adequate protection through a holdback or title insurance.
Common Questions
How do I find out if there is a lien on a property in Ontario?▾
Can I buy a property that has a lien on it?▾
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