What happens if a subcontractor puts a lien on my property?

If a subcontractor puts a lien on your Ottawa property, you could lose your home if the debt isn't resolved - but Ontario's Construction Lien Act provides specific protections and procedures to help homeowners navigate this serious situation.

Understanding Construction Liens in Ontario

A construction lien gives contractors, subcontractors, and suppliers a legal claim against your property for unpaid work or materials. In Ontario, they have 60 days from substantial completion to register the lien, and it attaches to your property title, potentially preventing you from selling or refinancing.

Your Rights Under Ontario's Construction Lien Act

The good news is that Ontario law includes a 10% holdback provision specifically designed to protect homeowners. When you hire a contractor in Ottawa, you're legally entitled to hold back 10% of each payment for 60 days after substantial completion. This holdback fund is meant to cover exactly these situations - unpaid subcontractors or suppliers.

If you properly held back the 10% and your main contractor failed to pay their subs, you can often resolve the lien by paying the amount owed directly from your holdback fund. However, if the lien exceeds your holdback amount, or if you didn't maintain proper holdbacks, the situation becomes more complex.

Immediate Steps When Facing a Lien

First, don't panic, but don't ignore it either. Contact a construction lawyer immediately - many offer free consultations for lien matters. You can also call the Law Society of Ontario's lawyer referral service at 1-855-947-5255 for help finding qualified legal counsel.

Verify the lien's validity by checking if the subcontractor actually worked on your property and whether proper notice procedures were followed. In Ontario, subcontractors must provide written notice to homeowners within 60 days of starting work, and many liens fail because this wasn't done properly.

Working with Your General Contractor

If you hired a general contractor who failed to pay their subs, this is primarily their responsibility. Contact your contractor immediately and demand they resolve the situation. If they're legitimate and still in business, they should handle this quickly to protect their reputation and licensing.

Check if your contractor has WSIB coverage through wsib.ca/clearances - contractors without proper coverage often struggle financially and may not pay their subcontractors. Also verify their business registration through ontario.ca/page/search-business-corporation.

Resolution Options

You have several paths forward. You might pay the subcontractor directly and pursue your general contractor for reimbursement. You could negotiate a payment plan with the lien holder. In some cases, you might need to post security (like a bond) to have the lien removed while disputing it.

If the amount is substantial, the subcontractor might eventually force a sale of your property to collect - but this is expensive and time-consuming for them, so most prefer negotiated settlements.

Prevention for Future Projects

For your next Ottawa renovation project, always verify contractors through ESA (esasafe.com/contractor-locator) for electrical work, TSSA (tssa.org) for gas work, and ensure they have current WSIB clearance. Maintain the 10% holdback religiously, and consider requiring lien waivers from major subcontractors before making payments.

The City of Ottawa Building Code Services (613-580-2424) can also help verify if contractors have proper permits, which legitimate contractors always obtain.

Bottom line: Act quickly, get legal advice, and remember that Ontario's lien laws include protections for homeowners who follow proper procedures.