Common Misconceptions about Construction Liens: Debunking the Myths

Liens are a critical tool for contractors, suppliers, and other businesses to secure payment for the work they have performed or the materials they have provided on a construction project. However, despite their importance, there are many misconceptions surrounding the lien process. In this blog, we will be discussing some of the most common myths and misconceptions about liens, and setting the record straight.

Myth 1: Liens can only be filed by contractors

FALSE.

Liens can be filed by anyone who has provided labour or materials to a construction project, including subcontractors, suppliers, and even architects or engineers.

Myth 2: Liens can only be filed on residential properties

FALSE.

Liens can be filed on any type of property, including commercial, industrial, vacant land and even public works projects.

Myth 3: Liens can be filed at any time during the construction project

FALSE.

Liens must be filed within a specific time frame, which is determined by provincial law. In some provinces, the deadline is as short as 40 days after the last day of work (or abandonment of the project for non-payment), so it’s important to be aware of the deadlines in your province. In Ontario, for example, a construction lien must be filed within 60 DAYS of last performing work on the project.

Myth 4: Liens automatically result in the foreclosure/seizure of a property

FALSE.

Liens are a claim on the property, and foreclosure is a separate legal process that may or may not occur depending on the circumstances. In most cases, liens are paid or resolved before they reach the point of foreclosure because the owner wants to avoid such an outcome.

Myth 5: Liens only apply to the value of the work performed

FALSE.

Liens can apply to the full contract price, including any unpaid work, or the cost of the materials provided.

In conclusion, it’s important to understand the lien process and to dispel any misconceptions that may be hindering your ability to secure payment for your work. By doing so, you can protect your business interests and ensure that you receive the compensation you deserve.