Glossary
Lien
A registered claim against a property that secures a debt, giving a creditor a legal interest in the property until the debt is repaid..
A lien is a registered claim against a property that secures a debt, giving the creditor a legal interest in the property until the debt is paid or the lien is removed. It does not transfer ownership on its own; it attaches to the title and generally follows the property until discharged.
How liens work in Canada
Property law is provincial, so the names, registration rules, and deadlines differ across the country. Common examples include:
- Construction liens (also called builders' liens) filed by contractors, trades, or suppliers who have not been paid for work or materials supplied to the property.
- Municipal liens registered for unpaid property tax or utility charges.
- Canada Revenue Agency liens registered against real property for unpaid tax amounts.
- Condo or strata liens registered by a condominium corporation for unpaid common expenses.
- Judgment liens arising from a court judgment against the registered owner.
Because liens are registered in the provincial land registry, they usually surface during a title search or a title insurance review at purchase, refinance, or renewal.
Mortgage charges and lien priority
A mortgage is itself a form of charge or lien on title, and competing claims are ranked by priority. A first mortgage generally ranks ahead of a second mortgage or a home equity line of credit registered later. When a property sells, registered liens are typically paid out of the proceeds in order of priority, which is why a seller can receive less cash than expected.
A lien is one type of encumbrance — a limitation on the property that a buyer or lender must accept or clear. Not every encumbrance involves debt, but a lien always does.
Why liens matter to a borrower
A lender will normally require that liens ranking ahead of, or alongside, its own charge be discharged before it advances funds. An unresolved lien can delay closing, reduce the amount a lender is willing to advance, or block a refinance. Where a lien secures a defaulted debt, the creditor may eventually pursue a power of sale or foreclosure, depending on the province and the terms of the security.
For a buyer or owner, the practical step is to confirm the state of title before committing funds and to arrange for the seller or borrower to clear any unexpected lien on or before closing. A title search performed by a lawyer or notary is the usual way to identify what is registered.
Frequently asked questions
What is a lien on a house in Canada?
A lien is a registered claim against a property that secures a debt. It is recorded in the provincial land registry and stays on title until the debt is paid or the lien is discharged. Common examples include construction liens, municipal tax liens, CRA liens, and condo corporation liens for unpaid common expenses.
Does a lien have to be cleared before I sell or refinance?
In most cases, yes. A lender generally requires that existing liens be discharged before it advances new funds, and a buyer's lawyer or notary will typically insist that liens be paid out of the sale proceeds at closing. Unresolved liens can delay completion, so confirm the state of title early.
How do I find out if a property has a lien?
Order a title search through a lawyer, notary, or title insurer. The search shows registered charges and liens on the property, including those registered by municipalities, condominium corporations, courts, or the Canada Revenue Agency. Review the results before waiving conditions or advancing funds.
Sources
Related terms
- Encumbrance — An encumbrance is a registered claim or right affecting a property — such as an easement, lien, caveat, or mortgage charge — that binds the land itself.
- Caveat — A caveat is a notice registered on title claiming an interest in a property, which can block a sale or refinance until removed.
- Charge — A charge is the registration of a mortgage against a property's title, giving the lender a recorded claim on the home.
- Subordination — Subordination is an agreement that lets another charge, such as a new mortgage, rank ahead of an existing one on title.
- Title Search — A title search is a review of the public land registry that confirms property ownership and reveals registered claims such as liens, charges, and easements.