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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

Rent Control

Rent control refers to government regulations that limit how much landlords can increase rent for residential tenants each year.. more

Receivership

Receivership is a legal process where a court or secured creditor appoints a receiver to take control of a borrower’s assets, such as property or. more

REALTOR

A REALTOR is a licensed real estate professional who is a member of the Canadian Real Estate Association (CREA) and adheres to its Code of Ethics and. more

Property Use History

Property use history refers to the documented past uses, functions, and occupancy of a property, which may affect environmental risk, zoning, or. more

Property Management

Property management is the oversight and administration of real estate assets on behalf of the owner, covering leasing, maintenance, financial. more

Property Maintenance

Property maintenance refers to the ongoing upkeep, repair, and management of a building or land to preserve its safety, functionality, and appearance.. more

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