Liens do matter

Q. I recently purchased a new home and after a few months, I had some work done on the second bathroom and had the basement finished. The bathroom work was fine but the contractor I hired to finish the basement did a very poor job with bad wiring, plumbing and drywalling. I am refusing to pay him the full amount and will probably need someone to come in and fix what he has done. What should I be aware of?
 
A. Unfortunately, you are not alone when it comes to problems with contractors and the subcontractors that they hire to complete the work. Don’t get me wrong, there are a lot of very good trade people out there who do excellent work. 

However, it is the exception that I always hear about.

In terms of people who work on construction projects, they have a right to register a construction lien against the property they work on for unpaid work up to 45 days after they substantially complete all work on the project.

This does not mean coming back to put an electrical cover on a plug socket. However, placing large pieces of drywall would probably constitute substantial work.

If they are past that date, they can still pursue you for unpaid invoices in court but they cannot place a valid lien on the property.

Once the lien has been placed on the property, the contractor has another 45 days to “perfect” the lien by filing a Statement of Claim with the Superior Court of Ontario.  

Usually, contractors are quite savvy to this process and won’t miss these dates if you are raising a fuss and refusing to pay bills. What a lien effectively does is block you from completing any transactions on your home such as re-financing or selling the property.  You can pay the amount of money claimed into court to have the lien removed in order to complete transactions but you still need to battle it out with the contractor in order to decide what is payable.

This is a very specialized area of the courts and I usually refer my clients to a trustworthy and experienced practitioner who specializes in this area of law. Let’s hope you aren’t involved in a construction lien as it can be a frustrating and costly process.

– Jeffrey D. Cowan is the principal of Cowan & Taylor, Barristers & Solicitors. The information contained in this article should not be relied upon as legal advice.