Construction Liens in Ontario: The Hidden Risk Homeowners Miss
This is one of the most important and least-understood legal risks in Ontario renovation. A lien can be registered against your property even if you’ve paid your contractor in full.
How Liens Work (Ontario Construction Act)
Any supplier of services or materials to your property — including subcontractors your contractor hired — can register a lien if they’re unpaid by your contractor.
The scenario: You pay your GC $100,000. Your GC doesn’t pay the $20,000 owing to the electrical sub. The electrician registers a lien against YOUR property title. You’re now fighting a legal action for work you already paid for.
Your Protection Tools
1. Mandatory 10% Holdback (Required by Law)
Ontario’s Construction Act requires you to hold back 10% of every progress payment. Keep this holdback for 45 days after substantial completion before releasing it. This creates a lien fund.
2. Statutory Declaration at Final Payment
Before releasing final payment, require a statutory declaration (sworn by your GC before a Commissioner of Oaths) that all subcontractors and suppliers have been paid in full.
3. Lien Waivers
Request individual lien waivers from major subcontractors (electrical, plumbing, HVAC, structural) before releasing final payment.
4. Joint Cheques (for large projects)
Some homeowners issue payment cheques jointly to the GC and named major subcontractors — ensures subs are paid directly.
Lien Timeline
- 60-day lien registration window from last supply of services
- Land Registry registration — visible on title search
- Act quickly if you receive a lien claim notice
Always consult a real estate lawyer for projects over $100,000.
LF Builders provides statutory declarations and lien waivers on all projects: lfbuilders.ca
Legal protection discussions: home.renovation.reviews
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