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New Amendments to the Construction Lien Act

Author(s): Carly Fidler, Andrew Wong, Roger Gillott

Nov 2, 2010

As a part of the Ontario Government’s “Open for Business” initiative, the Ontario Legislature recently passed the Open for Business Act, 2010. This Act includes the following noteworthy changes to the Construction Lien Act:

  • Amendment to the definition of “improvement;”
  • Requirement that an owner publish notice of the intended registration of a condominium;
  • Removal of the requirement for an Affidavit of Verification for a claim for lien to be valid; and
  • deal with the enforcement of sheltered liens.

Definition of “Improvement”

In the recent Kennedy Electric decision, the court held that the supplier of a 100,000 square-foot, 500,000 ton assembly line consisting of 100 mezzanines and 165 platforms did not have lien rights, because the supply of the assembly line did not fall within the definition of an “improvement” since it was portable. In what was likely a response to this case, the definition of an “improvement” now expressly includes the installation of industrial, mechanical, electrical or other equipment on the land that is essential to the normal or intended use of the land. This will have a significant impact on the manner in which the courts deal with the application of the Construction Lien Act to equipment suppliers. This amendment is now in force.

Liening Condominiums

Under the new amendments, condominium developers must publish notice of their intention to register the condominium declaration in accordance with the Condominium Act, 1998 in a construction trade newspaper prior to registration.  The intent behind this requirement is to allow unpaid contractors, who wish to register liens, notice of the pending registration of the condominium declaration, so that they can preserve their lien rights before the declaration is registered.

Prior to the registration of the declaration, the condominium land can be liened in the usual manner even if the work of the contractor makes up parts of the project which, after registration of the declaration, will be components of the common elements. This notice period will allow contractors an opportunity to avoid the much more costly and complex requirement of liening the common elements of a condominium after the declaration has been registered.  

Affidavit of Verification

Historically, a claim for lien had to be verified by an Affidavit of Verification which was typically sworn by the lien claimant. In keeping up with the new electronic registration system for land titles documents, verifying a claim for lien by Affidavit is no longer required.

Sheltered Liens

A lien claimant whose lien is sheltered under a certificate of action that has been vacated by court order, will still be able to proceed with an action to enforce its sheltered lien as if the order to vacate had not been made, once this new amendment comes into force.  This amendment was introduced to facilitate the vacating of liens by court order, and to protect the rights of sheltered lien claimants.  This amendment, and the amendments dealing with the liening of condominiums and the affidavit of verification, will come into force on proclamation of the Open for Business Act, 2010.

Should you have any questions about these new amendments or you wish to discuss further, please contact either Roger Gillott or Andrew Wong, Partners in the Osler Construction and Infrastructure Group.