The Construction Lien Act of Ontario is a statute specifically drafted to protect contractors, employees, construction workers, and suppliers of materials. In the common law only those with a direct contractual relationship, or those who could claim in restitution (where a party had improperly benefited to the known detriment of another party) could sue successfully to recover the price for their services or products. Thus, in common law, sub-contractors, and suppliers to sub-contractors, employees or employment sub-contractors were left out in the cold…unable to sue on the land improved by their services or materials, and often unable to sue even the main contractor.

If you have done work, or provided services for an improvement to land, the Act will permit you to register a lien against the land, for any sums not paid to you, and to commence an action in Ontario Court General Division, against not only the party that hired you, but also against the owner of the land. This lien can be commenced for any amount, even if it is below the monetary threshold for General Division.

The lien must be registered at the Land Registry for the District in which the work was done, no later than 45 days from the last day of work, or the last day of supply of materials. Within 45 days of the registry of the lien at the local Land Registry, an action must be filled in General Division, a Certificate of Action obtained, and this certificate registered at the local Land Registry.

The claim thus registered must be served on the defendants, and then litigated.

Defense of a construction lien is a complex and technical process. Obviously, part of the claim may include set-offs and claims for deficiencies, while it may also involve claims for warranties, and claims in legal estoppel.

The defense will necessarily also challenge the formal correctness of the lien process and documents. Since a lien is a formal statutory exception to the common law, even the simplest error in the claim may lead to a dismissal of it.

It is possible for a defendant to relieve against the lien, which interferes with all dealings in the land, as well. The lien need not necessarily lead to a "freeze" in transaction respecting the land against which the charge in lien has been registered.

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