A Contractor's Lien Held Firm Through a Home Sale

The situation

Cristina and Analyn run a small renovation business together in Thunder Bay, taking on kitchen and bathroom remodels around their day jobs. Cristina works as a grocery clerk; Analyn drives long-haul routes for weeks at a stretch. The renovation work happens on evenings, weekends, and whatever days Analyn is home between trips, and it had grown steadily by word of mouth over a few years.

In the spring, they took on a full kitchen renovation for a homeowner named Hassan: new cabinetry, countertops, a plumbing rough-in relocation, and flooring, quoted at roughly $28,000. Hassan paid a deposit of about $8,000 up front, leaving a balance of about $20,000 due on completion. The job ran about ten weeks, mostly in evening sessions, and included a handful of changes Hassan requested along the way — a different cabinet finish, an added run of undercabinet wiring — that Cristina and Analyn tracked in text messages and a running list rather than formal written change orders.

When the kitchen was finished, they submitted a final invoice for the roughly $20,000 balance. Hassan disputed several items, questioned whether some of the requested changes had really been agreed to, and paid nothing further. Weeks of back-and-forth messages went nowhere. For a business the size of Cristina and Analyn's, a $20,000 shortfall was not a rounding error — it was close to what the renovation had cost them in materials and time, and it was money they had already counted on to cover the next several jobs on their schedule.

The legal problem

Cristina and Analyn came to us with a straightforward but time-sensitive question: how do you get paid when a client simply stops responding? For unpaid work on a property, Ontario's Construction Act gives contractors and subcontractors a powerful tool — a construction lien, a claim registered directly against the title to the property where the work was done. A validly registered lien encumbers the property, meaning the owner generally cannot sell or refinance it without either paying the amount claimed or having the lien removed some other way.

The catch is that a lien has to be registered within a strict deadline after the last supply of services or materials to the project, and once registered it has to be perfected — meaning a court action is started and a certificate of action is registered on title — within a further deadline, or it expires and the security is lost. Miss either window and the contractor is left with an ordinary breach-of-contract claim against the homeowner personally, with none of the leverage a lien provides.

We confirmed the amounts owing against the contract, the change list, and photos of the completed work, and registered a construction lien for roughly $20,000 against Hassan's property well within the required period. That, on its own, secured Cristina and Analyn's position — but it did not get them paid, and Hassan showed no sign of moving.

The real pressure point arrived about four months later, when Hassan's lawyer contacted us. Hassan had accepted an offer to sell the house. The sale could not close with an unresolved lien sitting on title — no buyer's lender would accept that, and no buyer's lawyer would let the deal close over it. Hassan wanted the lien gone quickly and quietly, for as little as possible.

What we did

1. Perfected the lien on schedule. We started the court action and registered the certificate of action within the required window, so the lien remained enforceable rather than lapsing while the dispute dragged on.
2. Held the line when the discharge offer came in. Hassan's lawyer initially proposed a full discharge of the lien in exchange for a reduced payment, well below the roughly $20,000 balance owed. We advised Cristina and Analyn against simply releasing the lien for less just because the sale was under time pressure — the pending sale was leverage for them, not a reason to fold.
3. Proposed vacating the lien by payment into court instead. Under the Construction Act, a court can order a lien vacated from title on the condition that the disputed amount, plus an additional buffer to cover potential costs, is paid into court. This removes the lien from the property and lets a sale close, while the underlying claim continues against the funds now held by the court rather than against the house itself. We proposed this route to Hassan's lawyer as the only version of a quick resolution we would recommend our clients accept.
4. Negotiated the amount and got a consent order. Rather than litigate the vacating motion, both sides agreed on the figure to be paid into court and put it into a consent order. The sale closed on schedule, with the agreed sum held by the court in place of the lien.
5. Pursued the underlying claim on its merits. With the sale no longer a pressure point for either side, we pressed the claim in Small Claims Court, backed by the written change list, photographs of completed work at each stage, and the original contract. Hassan's objections to the changes did not hold up once the documentation was laid out item by item.
6. Settled for the funds in court shortly before trial. With the evidence assembled and a trial date approaching, Hassan's lawyer proposed releasing the funds held in court to Cristina and Analyn in full satisfaction of the claim, avoiding a trial neither side particularly wanted.

The outcome

Cristina and Analyn recovered the full roughly $20,000 balance from the funds Hassan had paid into court, several months after the sale of the house had already closed. Hassan got what mattered most on the sale side — a clean closing on schedule, with no lien clouding the transfer. Neither side had to wait for the other's problem to be solved before solving their own.

The sequence mattered. Because the lien was registered and perfected correctly and on time, Cristina and Analyn had genuine leverage when the sale came up — leverage that would have evaporated if the lien had lapsed, or if they had accepted a quick discounted discharge under pressure. Contractors who feel rushed into a lower number the moment a sale is announced are usually giving up leverage they did not need to give up. Because the payment-into-court route exists, that leverage did not have to block a sale that had nothing to do with the underlying dispute over cabinet finishes and wiring. The lien moved from the property to a fund; the fight over who was right continued on its own timeline.

It also mattered that Cristina and Analyn had kept some record of the changes Hassan requested, even informally in text messages. That record turned a he-said-she-said dispute over authorized extras into a documented one, which is what ultimately persuaded Hassan's side to settle for the full amount rather than continue disputing specific line items at trial.

What you can learn from this