Understanding Construction Lien Laws in Canada

Every Canadian province has its own construction lien (or 'builders' lien') legislation, but the underlying concept is similar: a contractor, subcontractor, or supplier who has not been paid for work or materials supplied to a project can register a lien against the property's title. This is true even if the property owner already paid the general contractor in full -- if the general contractor did not pass payment down to a subtrade, that subtrade can still lien the owner's property in many provinces.

This is exactly what statutory holdbacks are designed to manage. Most provincial lien acts require the owner (or the payer at each level of the contract chain) to hold back a percentage of each payment -- commonly 10% -- for a defined period after substantial performance is certified. That holdback period gives unpaid subtrades a window to register a lien before the held-back funds are released.

For an owner, the practical protection is straightforward: never release the full holdback early, get lien waivers or statutory declarations from the general contractor confirming subtrades and suppliers have been paid before releasing final payment, and understand that a title search before closing on a purchase, or before refinancing, will reveal any existing liens.

Lien deadlines are strict and vary by province (commonly 45 to 60 days from substantial performance or last supply of material/service). Missing the deadline extinguishes the lien right, which is why subtrades who are not being paid tend to act quickly rather than wait.