Construction liens provide contractors with an invaluable means of ensuring they receive compensation for their services. However, they are also subject to strict timelines, failure to comply with which may have devastating consequences. For this reason, it is of the utmost importance that contractors understand the timelines applying to liens in Ontario.
1. What is a Lien?
A construction lien is a legal claim on a property used by contractors, suppliers, or subcontractors to ensure they get paid for their work on that property. A lien attaches to a property as collateral with respect to a debt owed to a contractor, supplier, or subcontractor.
2. When Does a Lien Arise?
In Ontario, liens are governed by the Construction Act. Under the Act, a lien first arises when a person “…first supplies services or materials” to the subject improvement.
3. Timeline of Liens
Although liens arise upon the supply of material or services, they are subject to rigid timelines, and will expire if they are not “preserved”, and subsequently “perfected”.
A. Preserving a Lien
Pursuant to section 31(2) of the Construction Act, a contractor’s lien will expire if it is not preserved. In most cases, a lien is preserved by being registered against the title of the subject land within 60 days of the earlier of the day it arose. In cases where the lien does not attach to the subject premises, it will not be preserved by registration, but rather by giving the owner a copy of a claim for lien. If a lien is not preserved within this 60 day timeline, it will expire.
B. Perfecting a Lien
Once a lien has been preserved, it must be perfected within 90 days of its preservation. Generally, a lien will be perfected through the commencement of an action to enforce the lien. A lien will expire if it is not perfected within 90 days of its preservation.
Given the complexities of perfecting liens, and the strict deadlines involved in doing so, it is best to contact legal counsel to ensure that your liens are perfected within the requisite timeline. If you require assistance, please don’t hesitate to reach out to us. Our experienced team at Breedon Litigation is here to provide you with the guidance and expertise necessary to navigate the intricacies of lien perfection and protect your interests effectively.