Leaning towards liening? Don’t wait until the last minute to register your lien. In my nine years of practicing law, I think I can count on one hand the number of times that my clients have given me more than three days to register their liens. It seems that most clients hold out hope until the absolute last minute that they are going to get paid, and then scramble at the last minute to protect their interests when it becomes clear that payment is not coming anytime soon.
If you suspect that you are not going to get paid anytime soon for the hard work and materials that you supplied to a construction project, you should consult a lawyer at least seven business days before your 45-day period expires. Here’s why:
Most of the properties in Ontario are now registered in the Land Titles system, which is an electronic registry system. There are still some properties registered in the Land Registry system, which remains paper-based. The following scenarios will help demonstrate why you should consult us earlier in the process:
Scenario #1 – The Cottage Property
You have built a beautiful deck on a cottage property somewhere in Muskoka. The owner keeps stringing you along promising payment but never delivering. This particular property has not been converted to Land Titles. You need to register a lien. How do you do this in the old paper-based system? First of all, you need to find the property identification number and legal description. On the rare occasion, we can find these using a web-based service called Teraview. However, Teraview is mostly devoted to Land Titles, and you can’t register a Registry lien using Teraview. In these cases, we need to hire a conveyancer to attend the Registry office in Muskoka to manually search the paper records for the parcel register. This takes time, and you can’t guarantee that the conveyancer can do the search on a rush basis. Once they have found the parcel register, we have to draft a claim for lien and a document general in paper form, have the you review and sign it, and then courier the hard copy to the conveyancer to register in person. This process could take days and likely more than a week to complete. If you wait too long, you may not be able to register in time, resulting in a permanent loss of your lien rights.
Scenario #2 – Imperfect Conversion to Land Titles
You have installed flooring in an office building that was once an old warehouse in Toronto’s Liberty Village. The general contractor has failed to pay you. You have only dealt with the general contractor and have no idea who the owner is. Your contract references the municipal address for the building. You need to register a lien. How do you do this in the Land Titles system? Again, step one is finding the parcel register for the property. As this property is in Toronto it is in Land Titles and should be easily found using Teraview, right? Wrong! Your lawyer searched the municipal address in Teraview with no hits. You don’t know who owns the building, so your lawyer can’t search by owner in Teraview. What now? Enter the trusty conveyancer again. We would need to send a conveyancer to the Land Titles office to search the records manually. Once they provide us with the correct parcel register, we can meet with you to review and sign the claim for lien and electronically register it using Teraview. This process could take few days. Again, waiting to the last minute could be fatal to your lien.
If you are contemplating a lien, please contact the Construction Law group at Devry Smith Frank LLP as early as possible in the process. A couple hundred dollars spent early on for searches and conveyancer’s fees could be the difference between getting paid and losing thousands of dollars or more.
For more information about how to register your lien or any other questions about Construction Law, please feel free to contact Mark Mancini at 416-446-5830 or at email@example.com.