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A lien is a legal claim registered against a property’s title that secures a debt or obligation — such as an unpaid mortgage, contractor’s bill, or tax debt — giving the claimant a right to be paid from the property, typically before it can be sold or refinanced with clear title.
Once registered, a lien clouds title — the property typically cannot be sold or refinanced with clear title until the lien is paid off and discharged. A registered mortgage charge is itself one type of lien, securing the lender’s right to repayment.
Other common types include construction (or builders’) liens, which let unpaid contractors and suppliers register a claim within a statutory deadline set by each province’s construction lien legislation; tax liens for unpaid property tax; and judgment liens arising from a court order against the owner.
Buyers protect themselves against undisclosed liens through a title search before closing, and many also purchase a title insurance policy for additional protection.
Mortgages are a type of lien: a lender’s registered mortgage charge, or hypothec in Quebec, is itself a lien securing repayment of the loan.
Construction liens have strict deadlines: each province’s construction or builders’ lien legislation lets unpaid contractors and suppliers register a lien within a set statutory window after work is completed.
Must be resolved to convey clear title: a seller normally must pay out or discharge registered liens before or at closing so the buyer receives clear title.
Caught by the title search: a title search, or a title insurance policy, is how a buyer’s lawyer or notary identifies liens before funds are released.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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