YOU FOUND A LIEN ON YOUR HOME. NOW WHAT?

Mar-09-2022

Finding a lien on your property can be a shock. In some cases, you run the risk of a failed refinancing or a lawsuit stemming from an aborted closing. In other cases, liens can enable someone else to force the sale of your property without your consent. PBO’s Free Legal Advice Hotline receives calls regularly from Ontario homeowners dealing with a threat to their most important asset that they never saw coming. Every case is different, and you should get legal advice, whether from the Hotline or your own lawyer, but here are some basic suggestions for approaching a surprise lien.

 

What Kind of Lien Do You Have?

While all liens are tools designed to help people recover money owing to them, it is important to understand that there are different types of liens. You need to find out more about what kind of lien you have before you can take any steps.

Here are some of the most common types of liens:

  • Notices of Security Interest”, or “NOSIs”. If you rented or leased equipment that was installed in your home – like a furnace, water or air filter, or smart home system – you may have signed an agreement allowing the supplier to register a NOSI on title to your home. NOSIs are liens against the equipment, not against the home itself, but they have a similar effect.
  • Construction liens. If you’ve had any renovation services performed on your home or any home improvement materials delivered, the supplier can register a construction lien against your property.
  • Tax liens. Governments can place liens on your property if you owe them money for unpaid taxes.
  • Condo liens. If you own a condo and owe the condominium corporation money, like unpaid fees or fines, the corporation can place a lien on your unit.
  • Writs of Execution. If a court has ordered you to pay someone money but you haven’t paid, the person you owe can get a document called a Writ of Execution or Writ of Seizure and Sale. They can then give it to the sheriff in your region and ask the sheriff to seize and sell any real estate that you own to pay off your debt to them. The writ is registered against your name instead of your property, but it still puts your home at risk.

 

Find Out More About Your Lien

The first step in most cases will be to ask the person who told you about the lien to give you copies of any documents they have about the lien. You can do this even if the person is the lawyer for the “other side”.

If you can’t get documents from someone else, you can try to find them yourself.

For most types of liens, you’ll need an up-to-date copy of something called the “Parcel Register” for your property – this is a table showing a summary of who owns the property and what’s registered on title currently, including any mortgages (shown as a “charges”) and many types of liens.

Parcel Registers can be found by performing online searches for a small fee at the OnLand web portal, Ontario’s online Land Registry access, or through Teranet Express, a private company.

Sample image of a Parcel Register document

 

If you see the words  “LIEN” or “NO SEC INTEREST” in the “Instrument Type” column of the Parcel Register, you should also buy a copy of that document (sometimes called an “instrument”). Make a note of the registration number in the first column, and go back to do another search, but search by “document” instead of “property”, using that registration number. It will tell you who registered the lien, when, and under what laws.

If you think there might be a Writ of Execution under a court order, you can perform your own “execution search”, to find out if a writ is registered under your name in the region where you own property. This is not currently available online through OnLand, but can be done through Teranet Express.

 

How Do I Get Rid of a Lien?

There’s often no easy way to get rid of a lien. For many types of liens, if the lien was properly obtained and follows the rules, you will need to negotiate with the other party to pay off the debt in exchange for removal of the lien.

However, the Superior Court can order the removal of liens that are obtained improperly. This sometimes applies to NOSIs, if there were unfair practices or other problems with the contract that allowed the NOSI to be registered. Similarly, if a court order was made against you leading to a Writ of Execution, but you were never served with court documents and you would have had a defence against the claim if you had known about it, there may be steps you can take.

Another exception is a construction lien. Construction liens are different because they’re placed on title before the contractor or supplier has proved that you owe them any money. A construction lien will expire unless the contractor brings a court claim against you within a certain amount of time. Even if the contractor brings a claim, you can still get the lien taken off quickly by choosing to pay the amount of the lien to the court instead of to the contractor. The court will hold onto the money until the matter is resolved by a court proceeding or settlement.

 

Get Legal Advice

This article is not legal advice and shouldn’t be relied on as such. Navigating a lien is complex and is best done with the benefit of legal advice. If you learn about the lien when you’re selling your house, your real estate lawyer is in the best position to help you resolve the matter. If you can’t afford a lawyer, PBO’s Free Legal Advice Hotline may be able to provide some guidance on your options.