What Is a Lien on a House?
There are two major types of liens that might be placed on a property in Canada, a builders lien and a certificate of judgment. Placing a builders lien on a house is a legal method used by contractors, homebuilders, engineers and other professionals in the construction industry to secure payment for unpaid invoices and debts related to their work on that house. Placing a lien on a house effectively gives the lien claimant a stake in your property equal to what you owe them.
A certificate of judgment can be obtained by anyone (not limited to construction professionals) who successfully sues another person or company and obtains a judgment from a court. That judgment can then be registered on the title to any property owned by the person or company against whom the judgment was granted.
Who Can Put a Lien on Your House in Canada?
Anyone from builders, contractors, sub contractors, engineers, and architects, construction managers and material suppliers can place builders liens on properties in Canada. Construction professionals, creditors and even family members can place a lien on your home as well if they obtain a judgment, although they would have to take the matter to court, provide evidence of unpaid debt and win a certificate of judgment from the court before being able to register the lien.
Can Someone Put a Lien on My House With Me Knowing?
Although this doesn’t happen often, certain homeowners might find out their house has a lien placed on it when they go to sell. This can happen when a creditor or someone you owe money to, takes the matter to court and is granted a certificate of judgment. They can then take their certificate of judgment to the Land Title Office in the area that your house is located. When this happens, often the homeowners are formally notified but this isn’t always the case.
More often, owners of condominiums or strata units may find a lien placed on their home when a contractor who did work on the common property of the building was not paid and registered a lien. The standard process is for a contractor in that scenario to place a lien on every single strata unit in the building. Condominium owners often only find out that there are liens on their properties when they go to complete the sale of their condo.
How Do I Know If Someone Put a Lien on My House?
In order to know if someone placed a lien on your house, you can perform what is known as a lien search. You can request a lien search in one of three ways:
- In person at a Service BC location.
- With a title search agent or service (online or in person).
- By mailing your specific search request to BC Registry Services including a cheque of $10 payable to the Minister of Finance for the service fee.
A copy of the search results will be mailed to you once the search has been completed.
Can a House Be Sold With a Lien on It?
Unfortunately, a property (whether a home, condo, or bare land) can not be sold if there is a lien placed on it. The lien must be addressed and removed before you can sell your house. In certain cases the debtor is attempting to sell their house in order to pay off their debts, but are unable to due to the lien. Oftentimes the creditors who placed the lien on your home will be open to negotiating a way for you to pay them back because at the end of the day, they are just looking to get their money back.
How To Get a Lien off Your House
You can remove a lien off your home by one of three ways.
You can have a lien placed on your house removed if there is a flaw on the lien. This can be done by going to the land titles office and pointing out the flaw with a formal procedure.
In the case of a builders lien, another way to remove a lien from your house is by settling the debt you owe for the lien or by paying the amount of the holdback into court. The amount of the holdback may be significantly less than the amount of the lien.
Also in the case of a builders lien, you can cancel and remove the lien from your property by filling out and submitting Form 17 under the Land Title Act if no legal proceedings have taken place within a year.
For more information on what Builder Liens mean for owners and how to deal with them, visit our Builder Liens For Owners page here.
