A contractor put a construction lien on my Ontario home — what does that mean and what can I do?

A construction lien is a legal claim registered against your property by a contractor, subcontractor, or supplier who has not been paid for work or materials they provided to your property. In Ontario, the right to register a construction lien is created by the Construction Act.

A registered lien encumbers your title, which means you typically cannot sell or refinance the property until the lien is resolved. The lien claimant has a limited time to perfect the lien (commence a court action) after registration, failing which the lien can be discharged.

As a property owner, you have several options. First, if the claim is valid and unpaid, you can pay the contractor and have the lien discharged. Second, if you dispute the amount or the claim's validity, you can pay the disputed amount into court as security (a process called "vacating the lien"), which discharges the lien from title while preserving the contractor's claim against the court funds. Third, you can simply wait and, if the contractor fails to perfect within the legislated period, apply to have the lien discharged for lapse.

Under the Construction Act, owners are required to hold back a statutory holdback (typically 10% of the price payable) precisely to address situations where lien claims arise. Whether you complied with holdback rules affects your exposure. A construction law lawyer can advise on your specific circumstances.