Ontario Construction Lien Rules: Deadlines, Holdback and Who Can Claim

Rule 1 — Lien rights arise from supplying an improvement

If you supply services or materials that improve land — building, repairing, altering — the Construction Act gives you lien rights against the owner's interest in that land. You do not apply for these rights; they arise automatically. What you must do is preserve and perfect them in time.

Rule 2 — The deadlines are 60 days and then 90

Preservation: generally within 60 days of the trigger that applies to your role (publication of substantial performance, completion, abandonment or termination for contractors; last supply for most subcontractors and suppliers). Perfection: within 90 days after the last day preservation was available, by commencing the Superior Court action.

These periods are measured in days, not months, and courts do not extend them out of sympathy. The single most valuable habit in this area of law is calling for advice the moment payment stops.

Rule 3 — The 10% holdback is mandatory

Each payer must retain 10% of the price of services and materials until lien rights expire. The holdback protects the classes of lien claimants below the payer; releasing it early does not release the liability. Owners who pay out 100% during the lien period risk paying that 10% a second time.

Rule 4 — Contract money is trust money

Amounts received on account of a contract price are trust funds in the hands of owners, contractors and subcontractors for those below them in the chain. Directors and officers who let trust money leak into other uses can face personal liability — a rule that changes settlement conversations quickly.

Rule 5 — Prompt payment and adjudication run in parallel

Proper invoices sit on a 28-day payment clock; disputes can go to fast interim adjudication through ODACC while the project continues. Liens protect the security, prompt payment protects the cash flow — used together, they are considerably stronger than either alone.

Apply the rules to your project

Whether you are an owner deciding how much to hold back or a contractor watching an invoice age, the rules above have precise applications to your facts. A free 15-minute consultation confirms your dates, your holdback position and your fastest route to payment.