Previous articles have focused on the legislation governing construction liens and the various pitfalls associated with their preservation and perfection. Equally important is an understanding of the logistics of how liens and certificates of action are registered on title. Below are our top tips for ensuring liens are registered in a timely, organized manner.
Efficiently and Comprehensively Maintaining Your File in Case a Lien Needs to be Registered
- Carefully, and as completely as possible, identify the real property to which services are being delivered, including the municipal address, street location (including closest intersection) and the name(s) of registered owner(s). Be cognizant of the various sites to which products and services are delivered, and collect as much detailed information as possible regarding each site. This will mitigate the time and expense associated with the identification of the real property through title and other related investigations undertaken by counsel’s office. Consider maintaining a log or record of the property information for each job.
- Where a project is comprised of multiple municipal addresses, or is one or more plans of subdivision where municipal addresses have not been assigned, having an understanding of the geographic location of the lands (such as identifying the existing streets bounding on all sides of the project, or significant landmarks located adjacent to or near the project) is helpful to assist in locating the legal description of the project for lien purposes.
Take the Time to be Thorough in Completing Your Lien “Intake Form”
- Accurately provide the date of the last supply, as the limitation period runs from this date (note the new timelines under the Construction Act, R.S.O. 1990, c. C.30.).
- Properly identify: (i) all the extras negotiated after the contract was signed are included in the lien amount and (ii) the amount owing under the contract is inclusive of HST.
- Properly identify ALL parties that are involved in the project, including their full names and their full addresses for service, including postal codes.
- If you are intending to lien units on certain floors within a condominium, be conscious of the numbering of floors compared to the actual number of floors within a building. In situations where buildings do not list a 13th floor or a 3rd floor of the building, caution must be exercised to determine, for example, if a unit on the identified 14th floor of the building is in fact on the 13th level of the condominium. It is imperative to know how floors are numbered in condominium projects and how the number of such floors coincides with the levels of the condominium identified on the condominium plans, when identifying them for lien purposes.
Registration of a Construction Lien, Certificate of Action and Discharge of Construction Lien
An Acknowledgment and Direction must be signed by the lien claimant in respect of an electronic form of construction lien and in respect of a discharge of construction lien. The Acknowledgment and Direction will be provided by counsel, together with a copy of the electronic form of construction lien or discharge of construction lien, for signature prior to the registration of the construction lien or discharge of construction lien. An Acknowledgment and Direction is not required to be signed in connection with the registration of a certificate of action, as a certificate of action is issued by a court.
Timing of Certification of a Construction Lien, Certificate of Action and Discharge of Construction Lien
It is important to note, particularly in respect of a discharge of construction lien, that the Land Titles office has 21 days within which to certify any instrument from the date of its registration. This timing may become critical when the deletion of construction liens and, where applicable, related certificates of action, is time sensitive and required to be completed so as to permit other transactions (such as financing of the property that is the subject of the lien). Construction liens and related certificates of action will not be deleted from title to the property against which they are registered until the discharge of construction lien document registered to delete construction liens and related certificates of action has been certified by the Land Titles office. Where the Land Titles office raises questions relating to a discharge of construction lien in the course of its review for certification, the 21-day period for certification may be extended. Counsel for the owner or the lien claimant has no ability to expedite the certification by the Land Titles office of any instruments submitted for registration, so it is important to be mindful of the timing for dealing with construction liens relative to other transactions involving the property that is the subject of the construction liens.