Construction lien
Also: Lien, Claim for lien, Mechanics lien, Construction Lien Act (historical)
Quick definition: A statutory claim against an improved property (or against holdback funds for public property) that unpaid contractors, subcontractors and suppliers can register to secure payment for services or materials supplied.
Explanation
Beginner explanation
If a trade is not paid, it can register a lien against the property. That puts the owner and lenders on notice and creates pressure to resolve the payment.
Technical explanation
In Ontario, lien rights arise under the Construction Act. A lien must first be preserved — registered on title, or for public property given by notice — within 60 days of the triggering event: for contractors, publication of the certificate of Substantial performance or completion, abandonment or termination; for subcontractors, also their last supply. It must then be perfected by starting legal action within the further statutory period. The Holdback system limits the owner's exposure, provided holdback is properly retained. Lien periods and procedures differ by province and changed for Ontario projects procured after July 2018.
Practical example
A drywall subcontractor unpaid for $85,000 registers a lien 40 days after publication of the certificate of substantial performance. The owner, who has retained the 10% holdback, pays the amount into court to vacate the lien while the dispute proceeds.
Why it matters
Liens can block financing and sale of a property, and missed deadlines extinguish them, so dates of substantial performance and last supply matter greatly.
Standards and references
- How Long Do You Have to Preserve a Construction Lien?. Lerners LLP, 2025.Widely accepted professional interpretation
Supports: Lien purpose; 60-day preservation from triggering events for contractors and subcontractors; perfection as a later step - Construction Timelines in Ontario. JD Supra.Widely accepted professional interpretation
Supports: Applicable legislation depends on procurement date (pre-July 2018, 2018–2019, post-October 2019); 45- or 60-day periods
VDC Stack.io writes its own explanations and does not reproduce copyrighted standards text. Consult the cited standard for normative wording.
Cite this entry
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VDC Stack.io. (2026). Construction lien. In VDC Stack.io Knowledge Dictionary. Retrieved from https://vdcstack.io/dictionary/construction-lien/