If a contractor does not pay their suppliers and subcontractors for materials supplied to your property, or for work done on your home, you may find a lien on your property title or deed. A lien is a legal notice that someone is claiming the right to be paid from the value of your property. When this happens, you may have difficulty obtaining or renewing a mortgage or selling your home, until the lien holder has been paid and the lien removed.

A lien can be placed on your property even when you have already paid the contractor for the materials or subcontract work in question, if the contractor fails to pay these bills.

You can protect yourself by following the requirements of the Lien Act in your province. These laws vary somewhat from one province to another, but all require that you hold back a portion of the total job cost (usually 10% to 15%) for a period of time (commonly 30 to 45 days) after the work is completed. During this time, suppliers and/or subcontractors who did not get paid must register their lien with the courts. Your financial liability is limited to the amount of the holdback. Before releasing this final holdback payment, check with your land registry office to ensure that no liens have been registered against your property.

Because Lien laws vary among provinces, you should verify the current lien holdback requirements that apply to you. Click HERE for a list of provincial contacts.