Special report
For contractors, subcontractors, and suppliers working on construction projects in Ontario, the construction lien is one of the most powerful tools available to protect against non-payment. Registered against the owner’s land in most cases, a lien attaches to the property itself, which can create leverage that a damages claim cannot. But the remedy is governed by strict statutory rules under Ontario’s Construction Act, and missteps can extinguish an otherwise valid claim. In our experience representing clients throughout Ontario, the same potential issues come up time and again. Here are five to watch for:
#1: Missing the preservation deadline
The most common and most catastrophic mistake is simply waiting too long. A lien must be preserved by registering it on title within 60 days of the triggering event, which depending on the circumstances, may be the last date of supply, publication of a certificate of substantial performance, or completion, abandonment, or termination of a contract.
If you miss the 60-day window, your lien right is permanently extinguished, with no discretion for a court to revive it. You may still have other rights, such as a claim for breach of contract, breach of trust, or a claim on a Labour and Material Payment Bond, but the ability to pursue the holdback or register a lien on the owner’s title will be lost.
Takeaway: Understand when the lien period begins to run and diarize the 60-day deadline in your calendar.
#2: Confusing preservation with perfection
Registering a lien preserves it, but that is only step one. A preserved lien must also be perfected by commencing a court action and, in most cases, registering a certificate of action on title. The deadline to perfect is 90 days after the last day the lien could have been preserved, meaning up to 150 days from the original triggering event. Claimants can miss this because they register their lien and then let the matter sit while negotiations drag on. The clock runs regardless. If you’ve retained lawyers to pursue your lien rights, they will keep track of the perfection deadline.
Takeaway: Perfect your lien within 90 days of the last preservation date, even if you are negotiating settlement.
#3: Naming the wrong owner
A lien must correctly identify the registered owner of the property. Ownership is not always obvious; title may be in the name of a company, a trust, or a spouse, not the individual who hired you or signed your contract. This can impact whether you are a ‘contractor’ or a ‘subcontractor’ since a ‘contractor’ is defined as someone who has a contract directly with the owner. Incorrectly naming the owner is not a technical irregularity courts routinely overlook. Depending on the degree of error and whether the true owner is prejudiced, the lien may be invalidated entirely. In most cases, once registered, a lien cannot be corrected; it must be formally released, and if the deadline has passed, your remedy may be gone.
Takeaway: Know the full municipal address of the location of the improvement and have a legal description. Ideally, obtain a title search well before you need to lien to confirm the identity of the owner in case the person who signed your contract is not the person who owns the land.
#4: Overstating the amount of the lien
The amount claimed must reflect what is actually owed based on the price or value of materials or services delivered to the improvement at the time of registration, no more. Including projected costs, unapproved extras, or delay damages is tempting but risky. Under the Construction Act, a court may reduce an exaggerated lien and, in cases of significant overstatement, vacate it altogether. Cost consequences may follow if a party registers a lien that they knew or ought to have known was excessive. If your claim includes disputed amounts not yet approved in writing, take a conservative approach and get legal advice before registering. The Construction Act also states in section 86 that the person representing a lien claimant can be personally responsible for costs for participating in pursuing a knowingly exaggerated lien. As such, legal advice can help you determine the appropriate lien amount.
Takeaway: Claim only what you can prove, as an inflated lien is easier to attack, and harder to prove, than an accurate one.
#5: Ignoring the holdback
Under the Construction Act, every owner must hold back from payment 10% of the price of services or materials supplied to the improvement. For example, on a $100,000 invoice, the owner pays $90,000 and retains $10,000. This obligation flows down the entire construction pyramid: contractors must hold back 10% from subcontractors, subcontractors from their subtrades, and so on. The holdback is a legislated amount against which lien claimants can recover if they are not paid. If an owner fails to maintain the required holdback, it can be liable to replenish the holdback from its own funds or be liable for judgment.
As of January 1, 2026, the holdback regime changed significantly. On projects spanning more than one year, owners are now required to release accrued holdback annually. The
owner must publish a notice of annual holdback release within 14 days of each contract anniversary, then pay out the accrued holdback no earlier than 60 days and no later than 74 days after that notice is published, provided no lien has been preserved or perfected during that window. Importantly, lien rights are not extinguished by the annual release; the standard preservation deadlines tied to substantial performance, completion, termination, or abandonment of the contract still govern.
For subcontractors and suppliers, even without a direct contract with the owner, your lien rights attach to the holdback fund.
Takeaway: The statutory holdback fund is held to be a sacrosanct fund available to lien claimants and can create liability for owners who do not comply.
The bottom line
The construction lien is a powerful remedy, but only if exercised correctly and on time. The rules are technical, the deadlines are fixed, and the consequences of missing them can be severe. If you are facing a non-payment situation, whether as a general contractor, subcontractor, or supplier, get legal advice early. The earlier you act, the more options you have.
Brianna Wodehouse is an an associate with the construction law team at Gionet Fairley Wood LLP, which is experienced in both pursuing and defending lien actions across Ontario.