- A lien generally expires unless it is preserved within 60 days and then perfected within 90 days.
- Anyone can get a registered lien vacated by paying money into court or posting security.
- Every payer under a contract where a lien may arise must keep a 10 per cent holdback.
Finding a construction lien on the title to your home is stressful. It can make you worry about selling, refinancing or simply what the contractor can do next. A lien is a claim registered against the property by someone who says they were not paid for work or materials.
A lien is not the end of the story. It runs on deadlines, and it can be removed in more than one way. This article explains the holdback rule, the dates to check, and how a lien is vacated, so you can decide what to do next.
What a construction lien is and why holdback matters
A construction lien is a claim against your property made by a person who supplied work or materials to an improvement and says they are owed money. It shows up on title once it is registered, which is why buyers, lenders and lawyers notice it.
The Construction Act requires every payer under a contract or subcontract on which a lien may arise to keep a holdback of 10 per cent. In plain terms, a portion of what is owed is meant to be held back so that unpaid people down the line have something to look to. If you are the owner paying a contractor, ask your lawyer how the holdback applied to your job.
The deadlines that decide whether a lien survives
Liens are time-limited. A contractor's lien generally expires unless it is preserved within 60 days. That period runs from the earliest of the events listed in section 31(2), such as the contract being completed, abandoned or terminated.
Preserving the lien is only the first step. A preserved lien also expires unless it is perfected within 90 days. If either deadline was missed, the lien may have lapsed, but whether it did depends on the exact dates and facts.
| Step | Time limit |
|---|---|
| Preserve the lien | Generally within 60 days of the earliest listed event, such as completion, abandonment or termination |
| Perfect the lien | Within 90 days, or the preserved lien expires |
How a registered lien can be vacated
If you need the lien off title, for example to close a sale or complete a refinancing, you do not have to wait for the dispute to end. Anyone can get an order vacating a registered lien, without notice, by paying into court or posting security.
The amount is the full amount claimed plus the lesser of $250,000 or 25 per cent of that amount as security for costs. The court may instead accept an amount it considers reasonable.
- Vacating moves the claim from your property to the money or security that was paid in.
- It does not decide whether the contractor is actually owed anything.
- The dispute can carry on separately, so keep your records.
Are you an owner or a home buyer?
If you are buying a new home from a builder, the rules treat you differently. Under the Construction Act, a home buyer is not an owner. A home buyer is someone who buys an owner's interest in a home where no more than 30% of the price is paid before conveyance and the home is not conveyed until ready for occupancy.
If that describes your purchase, say so to your lawyer right away, because it affects how a lien against the property relates to you.
What to do next
- Get a copy of the registered lien and note the claimed amount, the registration date and who registered it.
- Write down when the contract was completed, abandoned or terminated, and count 60 days from the earliest relevant event.
- Check whether the lien was perfected within 90 days.
- Gather the contract, invoices, proof of payments and messages with the contractor.
- Decide whether you need the lien removed now, for a sale or refinance, or whether you can let it run its course.
- Speak with a real estate lawyer before paying money into court or posting security, as the amounts can be large.
Frequently asked questions
Can a construction lien just disappear?
It can expire. A lien generally expires unless it is preserved within 60 days, and a preserved lien expires unless it is perfected within 90 days. Whether it has lapsed depends on the exact dates.
How do I get a lien removed from my title?
Anyone can get an order vacating a registered lien by paying into court or posting security, without notice. The court may accept a different amount if it considers it reasonable.
How much would I have to pay in to vacate a lien?
The amount is the full claim plus the lesser of $250,000 or 25 per cent of the claim as security for costs. The court can instead accept an amount it considers reasonable.
What is holdback?
Every payer under a contract or subcontract on which a lien may arise must keep a 10 per cent holdback. It is meant to protect people who may be owed money on the project.
Sources
- Construction Act (e-Laws) — Ontario e-Laws
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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