How to Remove a Lien
How to remove a lien depends on type of lien you want to discharge. There are four basic reasons to remove a builders’ lien from title on a property in Canada. Removing a lien with Lien-Pro is a simple inexpensive process.
Note: If you are a property owner, Lien-Pro cannot assist with the removal of a lien from your property. We are only able to remove liens on behalf of lienholders – those who originally placed the lien.
Here are the most common ways a lien may be removed:
- Direct Discharge of Lien
In most cases, after your lien has been filed your customer resolves their account and you need to remove a lien. Once you have received payment in full, or a settlement amount, and the funds have cleared then you are obligated to remove the lien, You can contact Lien-Pro directly to remove liens. Lien-Pro requires written notice by email or fax stating confirming you want the lien removed. Once we have received your request, your lien discharge request will be submitted to the appropriate land registry office for removal within 24-48 hours. Note: Actual discharge processing times vary by province*.
In Alberta we offer additional discharge services: regular discharge and RUSH discharge services.
Regular: After your request is received Lien-Pro will process the discharge paperwork and submit it to land titles. Confirmation of removal via our online account is generally given within 5-10 business days*. Lien-Pro will provide you with registration confirmation to prove the lien has been removed from the property.
RUSH: If you would like your lien removed immediately, Lien-Pro offers a RUSH discharge service in which the discharge is prepared and hand delivered to land titles the same day. Please contact our office for information about RUSH discharge services. Confirmation of the removal via our online account is generally given within 1 to 2 business days*.
*The time given discharging a lien is approximate and varies by province. Processing times can also vary depending on the volume of liens received at land titles. Liens have a higher priority than discharges because of specific legislation.
- Discharge in Trust
Sometimes liens can be removed “in trust”. A discharge in trust is a method used to remove a lien via a third party, usually a lawyer. For example, if your customer has payment but would like the lien to be removed prior to releasing the funds, a discharge in trust can be useful. In this case, your customer would pay the cost of the lien into a trust account with their lawyer. Their lawyer will then request that Lien-Pro discharges the lien and upon confirmation of the removal, the money in trust will be released to you.
- Consent Order/Court Order
In some cases, parties may take steps to have a lien removed by a Consent Order or a Court Order. These processes are typically initiated by either the property owner’s or your customer’s lawyer. The initiating party must place money into court that is equal to the value of the lien** + costs (typically 10-15% of the value of the lien**). In exchange for the monies being held in court, the lien will then be removed. A Consent Order involves all parties (including the lienholder) agreeing to the monies being placed in Court in exchange for the removal of the lien. This is an amicable way to have the lien removed. A Court Order involves the initiating party skipping the consent phase and simply making the request to remove the lien directly to the courts and land titles office.
In order to receive any of the money that has been placed into court, the former lienholder, must commence legal action.
**Value of the Lien: This amount can vary based on the appropriate provincial Builders’ Lien or Construction Lien Act. For example: In some provinces, parties may be only required to pay the lesser of the value of the lien or the amount remaining as holdback.
- Failure to prove lien
In some cases your customer may dispute your claim and send you a “Notice to Prove Lien” or “Notice for Lienholder to Take Action”. If you do not respond to their request and begin legal action to prove your lien within the given time limit, as indicated in the original notice, your lien will be removed and no longer valid. The deadline to commence legal action typically ranges from 15 to 30 days from the date of the notice.
Every lien has an expiration date. If your lien remains inactive i.e. no resolution, settlement, or pursuit of legal action by the time of its expiration date, your lien will no longer be considered valid and legally enforceable. An expired lien will remain on the property and is not automatically removed. For more information on this method of removal, we recommend speaking with a local land title office.
Lien deadlines vary by province. For example, in Alberta liens are valid for 180 days from the date of registration. In Ontario, the life of a lien is much shorter at 90 days – calculated from the last day on site or date of last supply. If you do not want your lien to expire you must “perfect” your lien by beginning legal action. In Alberta you must submit a claim stating that you are in the process of initiating a lawsuit also known as Lis Pendens within 180 days of the lien registration date.
Lien Removal Questions?
Give us a call! Every situation differs. If you are not the lienholder, unfortunately, we will be unable to assist with removing your lien.