If you’re a property owner or contractor in Ontario, dealing with a construction lien can be a complex and challenging process. Construction liens, also known as builder’s liens in Ontario, can hinder property transactions and lead to legal disputes. However, with the right approach and knowledge, vacating a construction lien is achievable. This article will guide you through the steps to vacate a construction lien effectively in Ontario.
Understanding Construction Liens in Ontario
A construction lien is a legal claim made by a contractor, subcontractor, or supplier who has not been paid for their work or materials on a property premise. This lien provides them with a security interest in the property, ensuring they are compensated for their services. While construction liens are a useful legal tool for contractors, they can be problematic for property owners, especially if they are invalid or filed in error. The lien claimant’s rights must be respected, but it’s crucial to ensure the lien is legitimate.
Steps to Vacate a Construction Lien
1. Review the Lien for Validity
The first step in vacating a construction lien is to review its validity. Ensure the lien complies with the Construction Act Ontario. Common issues that can invalidate a lien include:
- Incorrectly filed paperwork
- Failure to meet statutory deadlines (e.g., the lien must be registered within 60 days of the last day services or materials were provided)
- Inaccurate lien amount
- Lack of proper notice to the property owner
If you identify any of these issues, you may have grounds to challenge the lien’s validity. Remember, a lien must be perfected within the specified timeline to remain valid.
2. Negotiate with the Lienholder
Before taking any specific legal action, attempt to negotiate with the lienholder. Communication can often resolve disputes without the need for litigation. Discuss the outstanding amount and try to reach a settlement. If an agreement is reached, ensure the lienholder files a lien release with the local land registry office. This step is essential to avoid the need for a certificate of action.
3. Post Security to Vacate the Lien
In Ontario, property owners can post security (a bond or cash) to vacate the lien on title of the property. This security acts as a substitute for the property, allowing the property owner to proceed with transactions while the dispute is resolved. The security must be for an amount equal to the lien plus 25%, or $50,000, whichever is less. This ensures the rights of the lien claimant are preserved while also freeing up the property.
4. File a Motion to Vacate the Lien
If negotiation fails and the lienholder refuses to release the lien, you may need to file a motion with the court to vacate the lien. This legal action involves:
- Preparing the Motion: Work with an attorney to draft a motion outlining why the lien should be vacated. Include any evidence supporting your claim, such as proof of payment or documentation of lien errors.
- Serving the Motion: Serve the motion to the lienholder according to Ontario’s legal requirements.
- Attending Court Hearings: Attend court hearings and present your case. The court will review the evidence and decide whether to vacate the lien.
5. Obtain a Court Order
If the court rules in your favor, it will issue an order to vacate the lien. This court order must be filed with the local land registry office to remove the lien from the property records. Ensure you obtain a certified copy of the court order for your records.
Get Help from Experts in Construction Law
Vacating a construction lien in Ontario can be a complex process, but it is manageable with the right steps. Reviewing the lien for validity, negotiating with the lienholder, posting security, and, if necessary, pursuing legal action are all crucial steps in this process of a construction contract dispute. Always consult with a qualified attorney to guide you through the legal intricacies and ensure your rights are protected. This is especially important in the construction industry, where understanding the construction pyramid and the specific legal advice needed can be crucial.
At Cowan & Carter Law Firm, we specialize in construction law and are here to help you navigate the process of vacating a construction lien in Ontario. Contact us today for a consultation and let our experienced team assist you in protecting your property in Ontario and resolving your lien issues effectively. Whether you are involved in a construction project, renovation, or dealing with a claim for payment for goods or services that have been supplied to improve the construction of a property, we can provide the specific legal assistance you need.
DISCLAIMER: Please note this article is not legal advice. Always consult a lawyer for legal advice regarding your particular situation. The article is not necessarily a complete and accurate picture of the law – it is an article of a general nature.
