Removing Property Liens

Buying or selling a home ought to go smoothly, but last minute discoveries can tie up your plans in delays, litigation or lost deposits. 

Axess Law’s licensed real estate lawyers are on your side if a purchase or sale goes sideways because of a property lien by a contractor, mortgage lender, suppliers, tradespeople or architects.

Who Can Put a Lien on Your House in Ontario

Liens and hold-back rights are protections against non-payment of goods or services, like materials supplied to renovate a home. But they can go further than that. 

Your new condo purchase could be subject to a lien for unpaid condominium fees. Banks, credit unions and private lenders can put a lien on title to a property for non-payment of mortgage interest or principal. And claimants in legal actions may serve notice they intend to tie up a home’s sale until their litigation is resolved.  

Land owners could be held responsible for any lien on property in Ontario, even if it’s not their fault. Beware if a property you want to purchase or sell has a lien or writ of seizure and sale of personal property in Ontario against it. Fixing a property dispute may take time.


Kinds of Liens in Ontario


Construction Liens

Building or renovating your home can be exhilarating, but if your construction contract goes awry, expect to be served with a construction lien.

Contractors, subcontractors or building suppliers who claim you failed to pay for goods or services they provided have a right to place construction liens on a home or land until the claim is settled. 

Regardless of whether you paid a contractor or subcontractor, the Construction Lien Act gives labour and material suppliers the right to go after you for the actual amount of services or materials they supplied for “an improvement in land”. Claimants have up to 45 days from substantial completion of the general construction project to file a claim.


Mortgage Liens

Mortgage lenders take every precaution to protect loans they make to potential new build home buyers or resale home purchasers. 

That includes requiring new build buyers to hold back a portion of their final payment until after a home passes inspection and subcontractors are paid. If you are buying a resale home, lenders can refuse a mortgage if a lien is found or delay a property sale until the lien is paid.

Likewise, sellers who default on payment of mortgage interest, principal or property taxes, could find their right to sell their home denied by an Ontario court. Your lender may send you a demand notice to pay the mortgage in full. Failure to settle could result in being taken to court to force the mortgage into default and sell your home to recoup the lender’s investment. 

Unless you can find a new lender on short notice, your right to sell your home can be blocked.


Special Assessments or Condominium Fees

Buying a condo gets complicated if the owner is behind on condominium fees or neglected to pay special assessments. Condo corporations can register liens against the title to the property and hold up a sale until outstanding charges are resolved. 

Since most condo units are mortgaged, lenders typically pay the lien and pursue the owner for costs, plus interest and legal fees. A unit for sale by court order is a sign the owner may have declined to pay the lien and been forced into default when their mortgage subsequently came due in full.


How to Remove a Lien From Your Property in Ontario

Buyers of resale homes are at the mercy of the owner. 

Resolving a lien on house could be as simple as the owner agreeing to pay for labour or material a contractor or subcontractor shorted a third party on. Owners who are adamant a contractor, subcontractor or other party who placed a lien is wrong can:

  1. Send a demand letter through a lawyer.
  2. Hire a mediator to work out a settlement.
  3. Request a legally binding decision from the Ontario Dispute Adjudication for Construction Contracts authority (ADACC).
  4. For disputes under $35,000, go to Ontario Small Claims Court.
  5. Pay the amount of the lien, plus 25% of court costs, to a court and pursue litigation later — that allows a mortgage lender to proceed with financing, since their exposure to potential financial risk is discharged.
  6. Make a statement of defence or bring their own legal claim.
  7. Or add a “third party” to a legal claim on the grounds they contributed to the lien occurring — but only if the court decides it won’t delay or complicate settling the dispute. 

Who Gets the Deposit in Lien Disputes

You may be forced to return the deposit in a failed property sale due to a lien dispute. 

Unresolved liens that hold up a home purchase can result in inconvenience to buyers. You may be potentially liable if the buyer:

  • loses the sale of their existing home due to title transfer delays
  • has to move or store furniture and personal goods during a dispute
  • rents or pays for alternate accommodation until a civil claim is settled.

Discuss your options with a lawyer to decide if it would be better to pay the lien and move on.


Why You Need a Real Estate Lawyer

Your Axess Law real estate lawyer checks for liens before they transfer title to a property to or from your name. 


Transfer Title to Property

Ontario homes or properties you offer to buy or sell that have outstanding liens may be ineligible for title transfers. You cannot take possession of a property even if you have already paid a real estate deposit, or obtain or discharge a mortgage, until financial disputes are resolved. That could add significant delays to purchasing a home you desire or selling a property you own.


Access Law Services

Axess Law answers your legal questions if a lien is discovered during a property title search. We negotiate with the seller’s lawyer to see if they will pay or, if you are the buyer, explain title delays to your mortgage lender. It’s up to you if you want to go ahead or withdraw altogether from the agreement of purchase and sale. 


Get Legal Referrals

You do have potential legal recourse against a seller if they misrepresented the property title as free and clear. We can refer you to trusted legal partners who can advise you on how to dispute a lien on your property in Ontario if your deal collapses.


Flat Fee Legal Services

When you’re ready to close the sale, Axess Law’s flat legal fees save you money on real estate transactions in Ontario. Whether you need a real estate attorney for new construction or lawyer in Toronto area or Ottawa who can close the deal quickly, Axess Law costs far less than you would otherwise pay.

Buying a home is only $999.99 and up for legal fees. Sellers, pay $799.99 and up to get your home deal done quickly and professionally. 

We do remote online video conferences anywhere in Ontario or meet with you at any Axess Law location in Greater Toronto Area or Ottawa. 

Make Phone or Online Appointments

Axess Law is open 7 days a week and has day or evening appointments for your convenience. Dial our 1-647-479-0118 lawyer line (toll free to 1-877-402-4277) or make appointments online with our easy booking form. It takes just minutes to complete. Use our onsite parking and take the transit. We have lawyers near you.

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