“Recent” amendments to the Ontario Construction Lien Act

In the age of Twitter and electronic media, it’s old news by now (the last of the amendments came into force last summer) but, in the interest of one-stop-shopping, I figured I ought to throw up a brief post summarizing the “recent” amendments to the  Construction Lien Act.

Definition of “improvement”

The definition of  “improvement” at section 1 of the Construction Lien Act has been amended and now expressly includes the installation of industrial, mechanical, electrical or other equipment on the land where the equipment is essential to the normal or intended use of the land.

It will be very interesting (for construction law nerds like myself, anyway) to see how far the courts will go in extending lien rights to installed equipment.  See my other post on this here.

Condominiums

Under this amendment (new section 33.1 of the Construction Lien Act), condominium developers will be required to publish notice of their intention to register the condominium declaration in accordance with the Condominium Act in a construction trade newspaper (the Daily Commercial News) five to fifteen days prior to registration.

This amendment will provide unpaid persons having liens notice of the pending registration of the condominium declaration so that they can preserve their lien rights before the lands and premises are legally divided into separate condominium units and title is transferred to homebuyers.

Prior to the registration of the declaration, the condominium improvement can be liened in the normal manner, even if the work of the person having a lien is to parts of the project which, after registration of the declaration, will be common elements. This amendment will provide an opportunity to avoid the much more expensive and time consuming requirement of liening the common elements of a condominium after the declaration has been registered.

Check out one of my colleague’s comments on this change here.

Affidavit of Verification

Prior to these amendments (to sections 34 and 40(1) of the Construction Lien Act), a claim for lien had to be verified by an Affidavit of Verification which was typically sworn by the lien claimant. In an effort to keep pace (or at least not fall out of sight) with the new(ish) electronic registration system for land titles documents, verifying a claim for lien by Affidavit will no longer be required.

Also, instead of cross-examining the deponent of the Affidavit of Verification, the lien claimant, the agent or assignee of the lien claimant, or a trustee of the workers’ trust fund (as the case may be) will be subject to cross examination.

Sheltered Liens

Under these amendments (to sections 44(9) and 47(2) of the Construction Lien Act), a lien claimant whose lien is sheltered under a certificate of action that has been vacated from title by Court Order will still be able to proceed with an action to enforce its sheltered lien as if the Order to vacate had not been made.

These amendments were introduced to facilitate the vacating of liens by Court Order while, at the same time, protecting the rights of sheltered lien claimants.

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2 thoughts on ““Recent” amendments to the Ontario Construction Lien Act

  1. As a homeowner, with a bogus lien on my property, it would be nice to have these laws tightened so that innocent homeowners are not forced to hire a lawyer to defend their property. As it stands a contractor can enter a home, burn it down and then run to the courts and put a lien on the property stating that they had materials in the home and had improved the home! Meanwhile, homeowners are left living in unlivable states and these so called renovators can move on. These laws are way one sided, and try and find information as a home owner! For homeowner information, if a lien is placed on your home, the contractor needs to hire a lawyer and take you to court, before 2 years from the date of the lien. You can also renew your mortgage with a lien, as long as you maintain the same mortgage broker!

    • Thanks for your comment, Margo. You’re certainly not the first owner to feel this way about lien legislation! The Construction Lien Act is quite powerful and I will agree with you that there is some room for contractors and subcontractors to abuse that power and put owners to great expense. I regularly represent parties on both sides of construction payment disputes and have, over the years, seen circumstances where both have been left pretty unhappy with the operation of the legislation. For what it’s worth, most contractors and subontractors aren’t entirely happy with the way the whole scheme works either.

      Your last two comments to other owners aren’t quite accurate so I will comment very briefly. First, there are certain steps that have to be taken within two years of perfecting a lien but the trial does not need to be completed within two years (see section 37 of the Construction Lien Act). Second, issues of financing where there is a lien on title will depend almost entirely on the lender and the circumstances and value of the lien, other financing, and the value of the property. I’m not sure that the mortgage broker used has much to do with it.

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