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A construction lien is the strongest security a trade has and the fastest right to lose. Preservation and perfection deadlines are calculated in days from events that are easy to misidentify, and the court has no power to extend them.
Book My 15-Minute Assessment →Under the Construction Act a lien must be preserved by registration or written notice within 60 days of the triggering event, and perfected by commencing an action and registering a certificate of action within 90 days after the last day it could have been preserved.
Under the current Construction Act a lien must be preserved within 60 days of the triggering event, which for a contractor is publication of a certificate of substantial performance or completion, abandonment or termination of the contract. It must then be perfected within 90 days after the last day it could have been preserved. Projects governed by the former Construction Lien Act carry a 45-day preservation period.
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The Construction Act, R.S.O. 1990, c. C.30, gives every person who supplies services or materials to an improvement a lien on the interest of the owner in the premises. The lien arises automatically when the supply begins; no registration is required for it to come into existence. What registration does is preserve it. The lien is security for the price of the services or materials supplied, and it ranks ahead of most subsequently registered interests, which is why a lien registered against title is taken seriously by owners, lenders and title insurers.
The Act was substantially reformed by amendments that renamed it from the Construction Lien Act and introduced a modernised holdback regime, mandatory prompt payment obligations and interim adjudication. Transition rules govern which version applies to a given project, generally by reference to when the contract was entered into, when the procurement process was commenced and when a premises lease was first entered into. Projects governed by the former regime carry the older 45-day preservation period, so the first step on any lien file is to confirm which version of the Act applies before any deadline is calculated.
Not every claim can be liened. The lien secures the value of services or materials actually supplied to the improvement, which means it does not extend to damages for delay, loss of profit on work never performed, or amounts claimed under a separate contract for a different property. Extras and change orders can be lienable where the work was in fact supplied, but a claim for disputed extras that were never authorised is a contract claim wearing a lien's clothing, and registering it at full value creates exposure. The Act also treats certain public land and Crown interests differently, requiring written notice of lien rather than registration.
Lexaltico LLP acts for owners, general contractors, subcontractors and suppliers. The advice differs entirely depending on which side of the payment chain you are on. A trade needs its lien preserved and perfected on time. An owner needs the lien vacated efficiently so that financing and closing can proceed, and needs to know whether it can safely pay down the chain without paying twice.
On the first supply of services or materials to the improvement. No filing is required at this stage, but records of what was supplied and when are what will later prove the claim.
For a contractor, publication of a certificate of substantial performance, or completion, abandonment or termination of the contract. For a subcontractor or supplier, the earlier of last supply, publication of the certificate, or completion, abandonment or termination of the subcontract.
The lien expires unless preserved within 60 days of the triggering event, by registering a claim for lien against title where the owner has an interest in the land, or by giving written notice of lien where the interest is a leasehold or where the improvement is to a public street or highway.
A preserved lien expires unless it is perfected within 90 days after the last day on which it could have been preserved. Perfection requires commencing an action to enforce the lien and, where the lien was registered, registering a certificate of action against title.
A perfected lien action must be moved along. The Act contains its own timelines for setting the action down for trial, and a defendant may move to have the lien dismissed where the claimant has not proceeded.
Registering a lien does not stop the underlying contract claim from running its own course. A claimant whose lien has expired still has two years from discovery under the Limitations Act, 2002 to sue on the contract, and a claimant with a valid lien should still plead the contract claim and, where applicable, the statutory trust claim in the same proceeding. Pleading all three at once costs very little and preserves recovery routes that survive if the lien is later found to be defective.
These deadlines are not limitation periods in the ordinary sense and they are not subject to the discoverability analysis in the Limitations Act, 2002. The lien simply expires. The court has no general discretion to revive an expired lien, and the claimant is left with an ordinary breach of contract claim against the party it contracted with, which is worth considerably less than security against the land.
Most missed deadlines result not from ignoring the calendar but from misidentifying the trigger. Was the last supply a genuine supply of services or materials, or was it a warranty call or a site visit that does not count? Was a certificate of substantial performance published, and when? Get the date confirmed by counsel rather than assumed.
Each payer on a contract or subcontract must retain a holdback equal to 10 per cent of the price of the services or materials as they are actually supplied. The holdback is the fund against which lien claims are ultimately satisfied, and a payer who retains it properly limits its exposure. A payer who releases the holdback early, or who pays down the chain after receiving written notice of a lien, can find itself liable to lien claimants for amounts it has already paid out once.
The holdback may be released after all liens that may be claimed against it have expired, been satisfied, discharged or otherwise provided for. The Act also permits annual and phased release of holdback in defined circumstances where the contract provides for it and the required publication is made, which is a meaningful cash flow benefit on long projects. Owners are also required to publish a certificate of substantial performance in the prescribed manner, and failure to do so affects when the lien clock begins to run for everyone downstream.
Trust obligations sit alongside the holdback. Amounts received by an owner, contractor or subcontractor on account of the price of the contract or subcontract are impressed with a trust in favour of those below them in the payment chain. Directors and officers of a corporation who assent to or acquiesce in conduct they know or reasonably ought to know amounts to a breach of that trust can be personally liable. Breach of trust claims survive a corporate defendant's insolvency in ways an ordinary debt does not, which makes them a valuable additional cause of action for an unpaid trade.
The prompt payment regime imposes fixed timelines through the payment chain. An owner that receives a proper invoice must pay the contractor within 28 days, unless it delivers a notice of non-payment in the prescribed form and within the prescribed time specifying the amount not being paid and the reasons. A contractor that is paid must pay its subcontractors within 7 days of receiving payment, and equivalent obligations cascade further down the chain. Where the owner does not pay, the contractor may still be obliged to pay subcontractors unless it delivers the required notice and, in defined circumstances, refers the matter to adjudication.
| Step | Obligation | Timeline |
|---|---|---|
| Proper invoice to owner | Owner pays the contractor | 28 days after the proper invoice is given |
| Owner disputes | Notice of non-payment in prescribed form | Within the prescribed period after the proper invoice |
| Contractor paid | Contractor pays subcontractors | 7 days after receiving payment |
| Contractor not paid | Notice of non-payment to subcontractors | Within the prescribed period, with reasons |
| Dispute unresolved | Interim adjudication under Part II.1 | Determination on a statutory expedited timetable |
Adjudication is the most significant practical change to Ontario construction disputes in a generation. It is an interim binding process: the adjudicator's determination must be complied with, and payment made, even though either party may afterwards litigate or arbitrate the merits. The timetable is short, which rewards parties whose records are in order and punishes those whose documentation is reconstructed after the fact. Adjudication does not replace the lien; it runs alongside it, and preservation and perfection deadlines continue to apply regardless of what is happening in an adjudication.
A registered lien blocks a sale or a refinancing, which is why owners generally need it removed quickly rather than litigated slowly. The Act provides a mechanism to vacate a lien by paying into court the full amount claimed plus security for costs in the prescribed amount. The lien then attaches to the money rather than to the land, title is cleared, and the underlying dispute continues without holding up the project or the transaction. Where a lien is clearly invalid, expired or grossly inflated, a motion to discharge it entirely may be the better course.
Inflated liens carry consequences. The Act provides that a person who preserves or perfects a lien for an amount grossly in excess of the amount owing, or where they know or ought to know that they do not have a lien, is liable to any person who suffers damage as a result. A trade that registers a lien for the full contract value including disputed extras and anticipated profit, rather than for the value of what was actually supplied, is exposed on that basis.
Lien actions themselves are subject to a modified procedure. The Act limits interlocutory steps, restricts the availability of discovery without leave, and directs that lien proceedings be conducted expeditiously and in a manner proportionate to the amount in issue. That framework keeps costs lower than in ordinary commercial litigation, which is another reason the great majority of lien claims resolve by negotiation once the security position is established.
On a new lien file our first task is always the same: identify which version of the Act applies, fix the triggering event, and calendar the preservation and perfection dates. Only once those are secured do we assess the merits, the quantum and the negotiating position. Deadlines cannot be recovered; strategy can be adjusted later.
Lien claims are also unusually amenable to early settlement, because the security position is objective. Once the amount is quantified and the lien is either valid or not, both sides can see the outcome without years of discovery, and the modified procedure under the Act keeps costs proportionate. Most construction lien claims in Ontario resolve by negotiation or at a settlement conference rather than by trial, and a claimant who has preserved and perfected properly negotiates from a materially stronger position than one relying on a contract claim alone.
For owners and developers we focus on clearing title efficiently and on ensuring that payment practices, holdback retention and notices of non-payment are structured so that liability is not incurred twice. For trades and suppliers we pursue the lien, the trust claim and the contract claim together, because the strongest recovery usually comes from combining them. Contact us as soon as payment becomes an issue, not once the sixty days have nearly run.
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