Common Mistakes That Invalidate a Construction Lien in Ontario

A construction lien is one of the most powerful tools available to contractors, subcontractors, and suppliers who have not been paid. But filing one is not enough on its own. Construction lien mistakes in Ontario happen more often than most people expect, and when they do, the right to recover payment can disappear entirely.

Under Ontario’s Construction Act, lien rights come with strict rules, tight deadlines, and specific procedural requirements. Miss a step and you may lose your right to recover payment. These are some common mistakes we see when dealing with construction lien disputes.

1. Assuming All Work Qualifies for Lien Rights

One of the most common assumptions we see is that all construction work automatically gives rise to lien rights. That is not always the case. The Construction Act only grants lien rights where services or materials are supplied to an “improvement,” and that term has a specific legal meaning.

The current Act contains a broader definition of improvement than existed under earlier versions of the legislation. While most traditional construction work clearly qualifies, disputes still arise over specialized equipment installations, temporary work, and other services at the margins of the definition. If there is any doubt about whether your work qualifies, get legal advice before assuming you have lien rights. Starting the lien process on a shaky foundation only creates bigger problems down the road.

2. Construction Lien Deadlines in Ontario

This is where most lien claims fall apart. A Lien must be preserved by registering it on title within 60 days of the applicable triggering event. Depending on the circumstances, that triggering event may be the last date of supply or services or materials, the date a certificate of substantial performance is published, or the completion, abandonment, or termination of the contract.

If you miss the 60-day window, your lien right is permanently extinguished. Courts have no discretion to revive it. You may still have other remedies, a breach of contract claim, a breach of trust claim, or a claim on a Labour and Material Payment Bond, but the ability to register a lien on the owner’s title and pursue the statutory holdback will be gone.

Preserving a lien 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 from the last day the lien could have been preserved, not from the date it was registered. Once perfected, the action must be set down for trial within two years of being commenced, or it may be deemed abandoned under the Act, though courts do have some discretion to extend that period.

Amendments to the Act that came into force on January 1, 2026 introduced a mandatory annual holdback release regime for contracts spanning more than one year. Owners must publish a notice of annual holdback release within 14 days of each contract anniversary and may then release the accrued holdback no earlier than 60 days and no later than 74 days after that notice, provided no lien has been preserved or perfected in the interim. Missing that window does not extinguish your lien rights entirely, but it does mean the released holdback funds are gone as a source of recovery. The standard preservation deadlines tied to substantial performance, completion, or termination of the contract still apply.

We regularly see clients come to us after one of these windows has already closed. The preservation and perfection deadlines are fixed, once they pass, your right to lien is gone.

3. Failing to Perfect the Lien

A common misunderstanding is that registering a lien is enough. It is not. Registering a lien preserves it, but a preserved lien is not a perfected one. To perfect a lien, you must also commence a court action and, in most cases, register a certificate of action on title. The deadline to do so is 90 days from the last day the lien could have been preserved, and not from the date you actually registered it.

We see contractors register their lien and then wait, assuming the matter is handled. When the 90-day period passes without an action being started and a certificate of action registered, the lien expires and the protection it offered disappears. Registration is the first step, not the last.

4. Wrong Date of Last Supply

If the date of last supply on your lien is wrong, you may create an argument that the lien was filed outside the 60-day preservation window, even if it was not. This is one of the more avoidable mistakes we see, and it usually comes down to poor recordkeeping or rushing through the registration process.

Under the Construction Act, a lien is not invalidated solely because it contains an error or omission. Section 6 of the Act provides that a lien is invalidated by an error or omission only if a person is prejudiced by it. Whether prejudice exists is a fact-specific determination, and the claimant bears the risk if the question is ever litigated. An incorrect date of last supply is also not correctable after registration; if the error is significant enough to matter, the lien may need to be vacated and re-registered, and if the preservation deadline has passed by then, that option is gone.

Keep careful records of when services and materials were last supplied to the improvement, and verify the date before filing. The date of last supply should reflect actual work performed on the improvement.

5. Naming the Wrong Party on a Construction Lien

A claim for lien must correctly identify the registered owner of the property. Failing to name the owner at all is fatal to the lien. Naming the wrong party is a mistake we see more often than you might expect, particularly on projects involving numbered companies, related corporations, or properties held in trust.

Some naming errors can be corrected if the mistake is minor and no one is misled by it. Others cannot. Obtain a title search before you need to file, not after. Confirm the full legal name of the registered owner and ensure it matches exactly what appears on title.

6. Registering Against the Wrong Property

On projects involving multiple properties, phased developments, condominiums, or sites with more than one PIN, it is possible to register a lien against the wrong parcel entirely. A lien registered against the wrong property does not attach to the right one, and under the Construction Act a lien must be registered against the actual parcel to which the improvement was made.

This is particularly common on condominium projects, where the legal description of the property changes as the project progresses through registration.

As with owner identification, errors in the legal description are not correctable after registration. The lien must be vacated and re-registered against the correct parcel, and if the preservation deadline has passed, that option is unavailable. Ensure you confirm the correct legal description and PIN before filing.

7. Liening a Landlord’s Interest

When work is done on leased premises, contractors sometimes assume they can automatically lien the landlord’s interest if the tenant does not pay. That is not the case. Under section19 of the Construction Act, a landlord's interest is only subject to a lien if the contractor gives the landlord written notice of the improvement before or promptly after work begins, and the landlord fails to give written notice of disclaimer within 10 days of receiving it.

General awareness of the project on the landlord’s part is not enough. The notice must be in writing, identify the parties and the scope of work, and make clear that the contractor will look to the landlord’s interest for payment if the tenant defaults. If the landlord serves a written disclaimer within the 10-day window, their interest is protected and the lien will attach only to the tenant's leasehold interest. If no disclaimer is served, the landlord's interest remains exposed.

8. Assuming Prompt Payment or Adjudication Replaces Construction Lien Rights

Since the introduction of prompt payment and adjudication under the Construction Act, some contractors have come to believe that these newer processes have replaced the need to register a lien. Prompt payment and adjudication are separate mechanisms that operate alongside lien rights, not instead of them.

Under the prompt payment regime, owners and contractors are subject to mandatory payment timelines and the right to dispute invoices through a formal process. Adjudication provides a rapid, binding interim dispute resolution mechanism for payment disputes, scope disagreements, and related matters. But neither process suspends lien deadlines.

9. Waiting Too Long to Get Legal Advice

If you think a mistake has been made with your lien, get legal advice immediately. Some errors can be corrected if they are caught early enough. Others cannot, but there may still be alternative ways to pursue payment, such as a breach of contract claim or a trust claim under the Act.

The key is not to wait. The earlier you act, the more options remain on the table.

Talk to a Construction Lawyer Before You File

Construction liens are a valuable protection, but they are easy to get wrong, and the consequences of errors are real. If you are dealing with an unpaid account on a construction project, or have concerns about an existing lien, the construction lawyers at Gionet Fairley Wood LLP can review your situation and advise on next steps. We represent clients across Barrie, Simcoe County, Muskoka, and the surrounding areas. Contact us through our website or call 705-468-1088.

The information provided in this blog is for general informational purposes only and should not be construed as legal advice. If you have legal questions, we strongly advise you to contact us.