I’m an owner and I hired a contractor to do some work for me. He demanded that I pay him but he’s over budget and there are serious deficiencies in his work. He’s threatening to put a lien on my property if I don’t pay him. Do I have any choice?

This is a very, very common issue that comes up for all sorts of construction projects.  The short answer is that, yes, you will likely have some options.  What your options are and, more importantly, which of those options is best in the circumstances, requires a detailed assessment of the facts and the contractual arrangement between you and your contractor.

In some cases, for example, where the claim for lien is registered at the end of the project (and assuming that all advances have been made by your lender and you aren’t refinancing or selling anytime soon), you can often simply leave it on title and it doesn’t really cause any problems while you try to resolve your differences with your contractor.  Other times, if the claim for lien is causing problems (i.e. you want to sell the property or your lender or landlord is requiring the claim for lien to be removed from title, etc), you can take advantage of provisions in the Construction Lien Act that allow you to post security (cash, letter of credit, lien bond) with the Court in order to obtain a discharge of the claim for lien from title.  In this case, the security posted with the Court stands in place of the claim for lien against the property, title is cleared, and you can then work things out or proceed with your dispute in an orderly fashion.

Posted in: Ontario Construction Lien Act FAQs