The Ontario Construction Lien Act allows lien claimants to register a single construction lien against more than one lot or property in certain circumstances. This single lien against multiple properties is referred to as a "general lien". In order to be able to register a general lien, the contractor, subcontractor or supplier must:
(a) have a single contract to supply services and/or materials to the multiple lots; and
(b) the lots must have been all be owned by the same owner at the time the work was completed.
A general lien simplifies the process of registering a lien against multiple properties because the lien claimant does not have to try to apportion the contract amount between the multiple properties. The time to register a general lien runs from either the publication of a Certificate of Substantial Completion or the last day of supply of goods and services to any of the lots within the group of lots. As a result, a general lien allows a construction lien to be filed against properties which otherwise would be out of time because the lien claimant had not supplied services or materials to that specific lot within the last 45 days (i.e. the usual deadline for filing a lien against a property).
Once a general lien is filed, the owner is able to have the general construction lien with respect to any individual lot removed through payment of a portion of the lien amount to be able to sell individual lots without payment of the whole amount of the general lien. On request by the owner, the Court will apportion the amount of a general lien over the lots covered by it and the owner can pay into Court the amount specified by the Court to remove the general lien on a specific lot.
Some owners may wish to avoid having to deal with general liens. If an owner wants to avoid a general lien, but the owner still wants a single contract for work to more than one property, a clause can be included in the contract with the contractor or supplier stating that construction liens arise and expire on a lot by lot basis. If this clause is included in the contract, a lien claimant does not have the right to register a general lien and would then have to file separate construction liens against the individual lots within 45 days of the publication of a Certificate of Substantial Performance or the last day of supply of goods and services to that particular lot.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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