Lien on Us: What Types of Work Can You Lien For?
One of the first questions a contractor or supplier looking to lien a property needs to answer is whether the services they provided are lienable under the Construction Act. At a high-level, the Construction Act states that a person must supply materials or services to an improvement before that person is entitled to a lien.
Supplying Materials means supplying property that becomes or is intended to become part of an improvement, at the request of or for the benefit of the owner of that improvement.
Supplying Services means performing any work which increases the value of an improvement at the request of or for the benefit of the improvement’s owner. It can also mean providing drawings or plans for a planned improvement even where work on the planned improvement never starts, in certain circumstances.
Improvement means any construction, installation, alteration, demolition, or capital repair performed on land.
A supply of materials or services is considered lienable when it satisfies the “nexus test” established by Ontario’s courts:
The “nexus test” focuses on the importance of the work’s function to the project, namely, whether the construction parties, particularly the owner, considered the subject services necessary for the completion of the project and whether the services benefited the majority of the contractors and subcontractors.
Courts have provided some guidance on what types of activities are lienable, but construction is a complicated, fact-specific business. Not every instance of “transportation” for example, will be the same as the “transportation” considered by the courts. The below non-exhaustive list of lienable and non-lienable services should be treated as a starting point for determining whether your work is lienable. We can then help you apply the law to your knowledge of the facts to help you reach a definitive answer.
- Construction work
- Supply of materials (other than moveable materials or structures)
- Supply of equipment
- Capital Repairs
- Site security
- Architectual services
- Maintenance work
- Deficiency work
- Snow removal
Potentially Lienable Services:
- Soils testing and remediation
- Site surveying
- Installing non-affixed materials or moveable structures (i.e., air conditioning units, fire extinguishers, furniture, temporary trailers etc.)
- Supplying landscaping services
- Offsite services
If your work on a project satisfies the above requirements, you may be entitled to register a lien and enforce any claims you might have under the Construction Act - assuming there are no issues with the timeliness of your lien or other distinguishing factors. If not, your situation may be more complicated, but there are still a number of tools available to you to recover amounts owing on a construction project, including adjudication and litigation.
It is also important to remember that lien remedies are not mutually exclusive to your other options. Just because you can register a lien, does not always mean that a lien is the best choice for your individual situation. We have the expertise and the experience to help you determine both if you can lien and if you should lien, and can help you plan the best route forward for your specific circumstances.
The information contained in this article is not legal advice.
*Lien On Us *is an ongoing series from Construct Legal discussing the basics of construction liens. In this article, you will learn about what services you can lien for, the test courts will apply when determining whether a service is lienable, and the different options that are available to you if your services are lienable and if they are not lienable.