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Summary: A lien is a registered legal claim against a property that secures an unpaid debt — a mortgage, a court judgment, a construction claim, or unpaid condo fees. Most are paid out and discharged at closing, but a few can delay or block a sale.
Finding a lien on title sounds alarming, but it rarely ends a deal. What matters is the type of lien, the amount, and how much time is left before closing. Most are cleared as a routine step; a small number need a court process or more lead time.
What is a lien on a property in Ontario?
A lien is an encumbrance: a legal claim registered against a property's title to secure an unpaid debt or obligation. Until it is resolved, it sits on title and prevents a clean transfer of ownership to a buyer.
Liens fall into two groups. A voluntary lien is one the owner agreed to, like a mortgage. An involuntary lien is registered by a creditor or contractor without the owner's consent, like a court judgment or a construction claim. That difference shapes how each one gets cleared.
Mortgage (charge) | Lien (involuntary) | |
How it arises | Voluntary, granted to a lender | Registered by a creditor or contractor |
Owner consent | Yes | No |
On title | Registered charge | Registered claim or writ |
Cleared by | Payout and discharge at closing | Payment, release, or court order |
How do liens show up on title?
Liens surface during the title search your lawyer runs before closing. Pulling the property's parcel register through OnLand, Ontario's online land registry, shows registered charges, but a second search is needed for court claims.
Writs of seizure and sale are tracked in a separate execution database, not on the parcel register, so your lawyer runs two searches: one against the property, and one against the exact registered name of the owner. Together they give the full picture of what must be cleared before title can transfer.
How does a lien affect a sale in Ontario?
Once a lien is found, the outcome usually falls into one of three paths. The seller's obligation is to deliver clear title at closing, so anything not permitted by the agreement of purchase and sale (APS) has to be dealt with first.
Paid out from the proceeds. The most common path. The seller's lawyer uses part of the sale funds to discharge the lien on closing day, registered at the same time as the transfer. A standard mortgage works this way.
Cleared with documentation. Some lienholders must provide a release or clearance before closing. This adds a step, and sometimes a short delay, but the sale proceeds once it is in hand.
Resolved through a court process. A disputed claim, or a writ with no funds to cover it, may need a court order before title can transfer. These take time and specialist advice.
The deciding factor is usually whether the sale proceeds cover what is owed and whether there is enough time before closing.
What types of liens come up most often?
The label "lien" covers several distinct claims, each with its own rules:
Writ of seizure and sale. Filed against an owner's name after a creditor wins a court judgment. It can block a transfer until paid or cleared, which is why the execution search matters.
Construction lien. Registered by an unpaid contractor, subcontractor, or supplier under the Construction Act (formerly the Construction Lien Act). It attaches to the land itself and stays until paid, released, or vacated by court order.
Condo lien. A condo corporation can register a claim against a unit for unpaid common expenses. A status certificate review surfaces arrears before they become a closing problem.
Property tax or utility arrears. Unpaid municipal taxes can become a priority claim against the property and are usually settled on the statement of adjustments at closing.
A power of sale transfer does not automatically wipe several of these: construction liens, condo liens, tax arrears, and certificates of pending litigation each have to be addressed on their own.
How do you clear a lien before closing?
A lien comes off title in one of a few ways, and the seller's lawyer handles the mechanics:
Pay and discharge. Pay the debt and register a discharge or release from the lienholder against title.
Vacate by court order. A court can order a lien removed, common with disputed construction liens, sometimes by paying the disputed amount into court so the sale can close while the dispute continues.
Negotiate a release. A creditor may accept a partial payment or arrangement and provide a release.
Sellers make this easier by flagging any known judgment, unpaid contractor, or arrears to their lawyer at the start, not on closing week, and by making sure the proceeds will cover what is owed. Buyers should confirm with their lawyer that the title and execution searches are done, that any issue found has a resolution and a date, and, for a condo, that the status certificate shows fees current.
Frequently asked questions
Can you sell a house with a lien on it in Ontario?
Usually yes. The lien is typically paid out from the sale proceeds and discharged at the same moment the transfer registers. The main requirement is that the proceeds are enough to cover what is owed.
What's the difference between a lien and a mortgage?
A mortgage is a voluntary charge a homeowner grants a lender as security for a loan. A lien is often involuntary — registered by a creditor or contractor to secure an unpaid debt without the owner's agreement. Both sit on title but are created and cleared differently.
How is a lien removed in Ontario?
Three main paths: pay the debt and register a discharge, obtain a court order to vacate the lien, or for some construction liens pay the disputed amount into court so the lien is vacated while the dispute continues.
What happens if a writ appears right before closing?
Your lawyer checks whether the writ matches the owner's exact registered name and what is owed. If it can be paid from proceeds, it is usually handled on closing day; if not, the parties decide next steps. Earlier discovery means better options.
Do construction liens work differently?
Yes. Construction liens fall under the Construction Act and carry their own deadlines for registration, holdbacks, and vacating. They often take more time and specific steps than a routine mortgage discharge.
Will a lien cost me my deposit?
Not on its own. Whether a deposit is at risk depends on your agreement of purchase and sale and how the situation is resolved, so raise it with your lawyer rather than assuming the worst.
About the author
Joel Fox is a co-founder and COO at Ownright. He helps run the firm's day-to-day work on Ontario residential closings, refinances, and sales, and writes regularly to demystify the parts of a transaction that most homeowners only encounter once or twice in their lives.
At Ownright, we focus entirely on Ontario residential real estate law, helping clients with purchase closings, refinances, and sales. Our licensed Ontario lawyers run the title and execution searches, clear any liens, and walk you through every step on a fully digital platform. You can start your closing online or get in touch with any questions.
Legal references: Construction Act, R.S.O. 1990, c. C.30 (formerly the Construction Lien Act); Execution Act, R.S.O. 1990, c. E.24; Condominium Act, 1998, S.O. 1998, c. 19; Land Titles Act, R.S.O. 1990, c. L.5.
Important note: This article is not legal advice. No one should act, or refrain from acting, based solely on the information in this post or any linked materials without first seeking appropriate legal or professional advice.
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