A construction lien provides a powerful way of collecting payment owed for services and/or materials supplied to a construction project. The lien creates an interest in the land where the work was carried out and prevents the owner of the property from selling or financing the property until the outstanding amount is paid.
There are strict timelines that must be followed to make use of a construction lien. In Ontario, if the construction contract was made on or after July 1, 2018, contractors and subcontractors have 60 days to register a lien. The date when the 60-day period begins depends on the circumstances.
For a contractor, the lien must be registered within 60 days of the earlier of:
- the date a certificate or declaration of substantial performance is published (if any); and
- the date the contract is completed, abandoned, or terminated.
For a subcontractor, the lien must be registered within 60 days of the earlier of:
- the date a certificate or declaration of substantial performance is published (if any);
- the date the person last supplied services or materials to the project;
- the date the contract is completed, abandoned, or terminated; and
- the date the subcontract is certified as completed.
After the lien is registered, if the outstanding amount remains unpaid, a lawsuit must be started within 90 days of the last day when the construction lien could be registered. The outstanding amount may be either paid to the person who registered the lien or held in court until the lawsuit is resolved.
To help ensure that your construction lien meets the applicable timelines and complies with the registration requirements, contact the Parente Borean LLP legal team.