- Governed by Ontario's Construction Act, construction liens arise when contractors, subcontractors, workers, or suppliers provide services or materials to improve a property and go unpaid.
- When a creditor obtains a judgment from an Ontario court, they can file a Writ of Seizure and Sale with the Sheriff's Office.
- The Canada Revenue Agency (CRA) can register a lien (called a "charge") against real property when a taxpayer owes outstanding federal taxes — income tax, HST, payroll deductions, or…
A lien is a legal claim against property that secures an unpaid debt or obligation. In Ontario real estate, liens surface during title searches and must be resolved before a clean transfer or mortgage can close. The trouble is that "lien" is an umbrella term that covers very different instruments — a construction lien, a tax lien, and a judgment execution writ all appear on title but arise from completely different sources and are removed in completely different ways.
This article maps the main categories of liens on title in Ontario, explains how each arises, and describes the typical path to removal.
Category 1: Construction Liens
Governed by Ontario's Construction Act, construction liens arise when contractors, subcontractors, workers, or suppliers provide services or materials to improve a property and go unpaid. A lien claimant registers a Claim for Lien in the Land Registry within the statutory period (as of writing, generally 60 days from the last day of supply — verify the current limit).
How to Remove a Construction Lien
Discharge by payment. The party who owes the money pays the claimant, and the claimant registers a Discharge of Claim for Lien.
Vacate by paying into court. Under the Construction Act, any interested person can apply to court to vacate a lien from title by paying the lien amount (plus a required percentage) into court. The lien is removed from title; the money stays in court as security while the underlying dispute is resolved separately.
Vacate for expiry. If the claimant fails to preserve or perfect the lien within the required timelines, the lien can be vacated on application as expired.
Bond substitution. A construction lien bond (a surety bond in the amount of the lien plus a required premium) can be posted in court to vacate the lien from title and substitute the bond as security.
Category 2: Executions (Judgment Liens)
When a creditor obtains a judgment from an Ontario court, they can file a Writ of Seizure and Sale with the Sheriff's Office. Writs are filed per county/district and bind all land the debtor owns in that jurisdiction at the time of filing, as well as land acquired afterward.
Writs appear in the Sheriff's execution search — a mandatory component of every real estate title search in Ontario. They do not appear in the Land Registry itself but must be cleared for title to pass.
How to Remove an Execution
Payment and withdrawal. The most straightforward resolution: pay the judgment debt (including any interest and enforcement costs), and the creditor withdraws the writ.
Wait for expiry. Writs expire after a set period (as of writing, generally six years — verify the current rule). After expiry without renewal, the writ no longer binds the property. However, creditors often renew before expiry.
Court order. If the writ is wrongly filed (wrong person, satisfied debt not withdrawn), you can apply to court for an order vacating or withdrawing the writ.
Negotiate with the creditor. Where the judgment relates to a genuine debt, many creditors will accept a reduced lump-sum settlement in exchange for withdrawing the writ so a sale or refinance can close.
Category 3: CRA and Tax Liens
The Canada Revenue Agency (CRA) can register a lien (called a "charge") against real property when a taxpayer owes outstanding federal taxes — income tax, HST, payroll deductions, or other federal obligations. The CRA registers this charge under the Income Tax Act or the Excise Tax Act.
A CRA lien gives the federal Crown a security interest in the property. It appears on a title search and must be addressed before a lender will advance funds secured against the property or a buyer can receive clear title.
How to Remove a CRA Lien
Pay the outstanding tax debt. On payment in full (including all assessed interest and penalties), the CRA will provide a release for registration. Timing can be an issue — CRA releases are not always processed immediately, and a seller dealing with this on the eve of closing may face delays.
Negotiate a payment arrangement. The CRA may agree to release the lien against a specific property if other adequate security is provided or if a portion of the sale proceeds is directed to CRA at closing. These arrangements require direct engagement with CRA and should involve an accountant or tax lawyer.
Challenge the assessment. If the underlying tax debt is disputed, the lien may be challengeable — but this is a separate tax dispute process and does not make the lien disappear during the dispute unless security is provided.
Category 4: Municipal Tax Arrears
Unpaid property taxes create a special lien in favour of the municipality under the Municipal Act. Tax arrears liens have priority over most other encumbrances — including prior-registered mortgages. A municipality that has not been paid for a sufficient period can ultimately proceed to a tax sale, selling the property to recover arrears regardless of other creditors.
How to Remove a Municipal Tax Lien
Pay the outstanding taxes, penalties, and interest to the municipality. Confirmation should be obtained in writing. Municipal tax certificates obtained as part of the title search process will disclose outstanding arrears.
Category 5: Hydro, Utility, and Other Statutory Liens
Ontario legislation gives certain entities — including some utilities and service providers — a statutory lien right for unpaid charges. Whether these liens attach to title and in what priority varies by statute. When title searches or vendor questionnaires reveal utility arrears, confirm whether those arrears are secured by a registered charge or simply an unsecured debt of the prior owner.
Liens vs. Encumbrances: A Quick Distinction
Not every charge on title is a lien. Mortgages, easements, restrictive covenants, and notices are all "encumbrances" but are not liens. The word "lien" specifically refers to charges securing an unpaid debt or obligation. In everyday conversation, people use the terms loosely — your lawyer will identify exactly what type of instrument appears on title and advise on the correct removal process.
Frequently asked questions
Can a lien prevent me from selling my home?
Yes. A lien on title means you cannot deliver clear title to a buyer, and most purchase agreements require clear title on closing. A lien must be discharged, vacated, or otherwise resolved — either before closing or from the proceeds of sale — for the deal to complete.
What happens if the seller can't pay off a lien before closing?
One common approach is a "holdback" or "solicitor's undertaking": the seller's lawyer retains funds from the sale proceeds in trust and undertakes to pay the lien and register a discharge immediately after closing. The buyer and buyer's lawyer must agree to this approach, and the lien must be quantifiable and payable from the proceeds.
Can I inherit a lien when I buy a property?
Generally, liens registered before your purchase affect the property and can follow it into your hands if not cleared at closing. Your lawyer's job is to ensure that all encumbrances not assumed by you are discharged at or before closing, paid from the vendor's proceeds. This is a core function of the real estate closing process.
My lender found a lien after we already signed a purchase agreement. What now?
Your lawyer will raise it as a "requisition" — a formal objection to title — and require the seller to clear it before closing. The standard form purchase agreement gives buyers a right to demand clear title and to rescind the agreement if the seller cannot deliver it. Do not ignore the issue or assume it will sort itself out.
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