Why a "Lien" Probably Won't Help You

Reading Time: 2 minutes

I get a phone call at least once a month, that goes something like this:

John Doe owes me money, so I want to register a lien on their property.

I've even had a real estate agent demand that I register a lien on a property during a commission dispute.

There seems to be a general misconception about the right to register a lien.

And as real estate professionals, it's important to understand how this mechanism works.

So let's break it down.

What is a Lien?

The right to lien a property exists under the Construction Act.

It is a legal claim registered on title of a property by someone who has supplied labor or materials for its improvement.

It's there to ensures that those who work on a property get paid.

Who Can Claim a Lien?

Contractors, subcontractors, workers, and suppliers who contribute to a property’s improvement.

What Can You Claim?

The value of labor and materials supplied.

When Can you Make a Claim?

1. You must register a lien within 60 days after the completion or abandonment of the project or last supply of services/materials.
2. Once registered, you have 90 days to start a lawsuit to enforce the lien, or else it expires.

– – –

So when is this info useful?

Well, when you're listing a property for sale, you want to make sure there are no liens on title (we talked about how to do this here).

Also, when you have clients preparing to make improvements to their property, it's important that they understand the risk of liens and holdback requirements.

So your duty is to alert them to seek the right advice.

As real estate professionals, the more knowledge of real estate matters you have, the more it enhances your professional credibility.