Lien

Learn how liens impact real estate transactions in Canada, how to identify and discharge them, and why they must be resolved before a sale.

Lien

May 22, 2025


What is a Lien?

A lien is a legal claim or charge placed on a property by a creditor, giving them the right to enforce payment by seizing or selling the property if debts remain unpaid.

Why Liens Matter in Real Estate

In Canadian real estate, liens affect a property’s title and must be cleared before it can be sold or refinanced. Types of liens include:
  • Mortgage liens (from lenders)
  • Tax liens (from unpaid municipal or federal taxes)
  • Construction liens (from unpaid contractors or suppliers)
  • Court-ordered liens (resulting from legal judgments)

A lien stays with the property—not the owner—and will be discovered during a title search. Buyers should never close on a home with an unresolved lien, and sellers must arrange for lien discharge prior to transfer of ownership.

Liens can complicate refinancing, delay closings, or result in forced sales. In some cases, lenders may allow a lien to be paid out from closing proceeds.

Understanding liens is essential for buyers, sellers, and lenders to ensure clean title and avoid legal entanglements.

Example of a Lien

A homeowner selling their property must pay off a $12,000 construction lien before the buyer’s lawyer will complete the title transfer.

Key Takeaways

  • Legal claim tied to unpaid debts.
  • Can come from lenders, contractors, or courts.
  • Blocks sale or refinance until resolved.
  • Found via title search.
  • Must be discharged for clean ownership.

Related Terms

  • Title Search
  • Encumbrance
  • Mortgage
  • Property Tax Arrears
  • Lien Discharge

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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