What is a lien on a property and will it affect my purchase?

A lien is a legal claim registered against a property that gives the claimant a security interest in the land. In the residential context, the most common liens are construction liens (sometimes called contractor's liens) and judgment liens. A construction lien can be filed by a contractor, subcontractor, or supplier who did work on the property and was not paid. The lien secures their right to be paid from the property itself.

In Ontario, the Construction Act governs construction liens. A lien claimant has a limited window — generally 60 days from the last date they supplied services or materials — to register a lien. Liens that are properly registered before that deadline can remain on title for a substantial period and must be dealt with before a purchaser can take clear title.

When your lawyer searches title, any registered liens will be flagged. The seller must either arrange for the lien to be discharged or post security (such as paying money into court) to vacate it from title so the sale can proceed. If you buy a property where a lien attaches undetected, the lienholder could potentially enforce against your property. Title insurance provides important protection against this scenario, particularly where a lien arises from work done shortly before closing and the registration deadline has not yet passed.