Liens, Tax Arrears and Old NOSIs on Title When Selling in Ontario

A buyer will want your title clear on closing. If a search turns up a tax certificate, a lien, a writ or an old notice you forgot about, it can hold up the sale. Knowing what each registration means helps you stay calm and plan.

This article explains, in general terms, how the common registrations on title work and how each is usually dealt with. What applies to your property depends on the facts, so confirm the details with a lawyer.

Finding out what is on your title

Anyone can search property records on OnLand for a fee. Reading the results is harder than finding them. ServiceOntario cannot search title, give legal advice or explain property records, and it refers people to a lawyer, title searcher or surveyor.

Ownership changes and other dealings with land are registered electronically by authorized users, such as Teraview account holders. How the search and the registrations are handled for your particular sale depends on your situation, so it is worth confirming with a lawyer.

Unpaid property taxes and tax arrears certificates

Unpaid property taxes are a special lien on the land. It ranks ahead of every other claim, lien or encumbrance except the Crown's. That is why buyers and their lawyers pay close attention to tax status.

If arrears are still owing on January 1 in the second year after the taxes became owing, the treasurer may register a tax arrears certificate on title. Before the one-year period under s. 379(1) of the Municipal Act, 2001 ends, anyone may cancel it by paying the cancellation price. That price covers arrears, current taxes, interest, penalties and reasonable municipal costs.

Cancellation prices are set property by property, so ask your municipality for the figure that applies to your home. A lawyer can tell you how the timing affects your closing.

CRA debts, writs of execution and construction liens

• CRA tax debt: the CRA may certify an unpaid tax debt and register the certificate in the Federal Court. A memorial of it may then be registered in the provincial land registry, creating a charge on the debtor's land that ranks behind interests perfected before it was recorded.
• Writ of execution: a writ binds the debtor's lands from the effective date of the writ, renewal or certificate noted in the sheriff's index.
• Construction lien: a contractor's lien expires 60 days after the triggering event in s. 31(2) of the Construction Act unless it is preserved, and it is preserved by registering a claim for lien on title. A preserved lien expires unless perfected within the 90-day period in s. 36(2).

A construction lien does not always have to be paid off from your sale proceeds directly. Under s. 44(1), the court must make an order vacating a lien when money or security is paid into court, and the motion can be made without notice. A lawyer can explain whether that route suits your situation.

Old NOSIs and discharges you cannot get

The Homeowner Protection Act became law on June 6, 2024. It bans registering new consumer Notices of Security Interest (NOSIs) and treats all consumer NOSIs already on title as expired.

An expired NOSI may still appear on title but does not affect the land. It can be removed through a lawyer with an Application to Amend the Register, a fee and a law statement.

A different problem arises when a mortgage is paid but the mortgagee cannot be found to sign a discharge. If the mortgagee cannot be found, or a discharge cannot otherwise be obtained, the court may allow the amount owing to be paid into court and order the mortgage discharged. A registered court discharge order has the same effect as a discharge signed by the mortgagee.

What to do next

• Ask a lawyer or title searcher to review your title before you list, not after an offer arrives.
• Check your property tax account with your municipality and ask for the cancellation price if a certificate has been registered.
• Gather paperwork on any renovation work, since unpaid contractors may have registered a lien.
• Look for any old NOSI or mortgage you thought was gone, and bring it to your lawyer.
• Ask your lawyer which registrations must be cleared before closing and how the payout will be handled.

Early review gives you time to deal with problems on your own schedule. Every title is different, so a lawyer can confirm what applies to yours.

Frequently asked questions