LIENS & GETTING PAID

Liens and getting paid refers to the legal tools available when payment on a construction project is delayed, reduced, or withheld. These remedies are designed to protect contractors, subcontractors, and suppliers who provide labour or materials, and to ensure that money flows properly down the construction chain. Construction liens in Ontario are among the most important tools available to secure unpaid amounts.

Ontario’s Construction Act provides several payment-protection mechanisms, including liens, holdbacks, and trust claims. A lien allows eligible parties to secure unpaid amounts (in some cases) against the property itself. These contractor lien rights are strictly governed by statute. The Act requires certain funds (holdbacks) to be withheld to protect lower-tier parties, while trust obligations impose strict rules on how project funds must be applied. These rights are powerful, but they are technical and deadline-driven. A missed step can permanently eliminate recovery options due to strict statutory lien deadlines.

Payment disputes are also increasingly addressed through interim adjudication, a faster, out-of-court process focused on resolving payment issues while projects are ongoing. Interim adjudication can sometimes be used alongside lien remedies. However, liens remain especially important where financial distress or insolvency is involved, as they preserve security against the property and can affect priority of claims.

When this issue typically arises

Issues around liens and payment usually arise when invoices go unpaid, holdbacks are not released, or funds are diverted elsewhere on a project. These problems often surface late in a project, after substantial work has already been completed, or when relationships between project participants begin to break down.

Because payment remedies are tied to strict statutory triggers and filing timelines, problems often escalate quickly once they arise.

Why timing and strategy matter

Payment rights under the Construction Act are strictly enforced. Lien preservation and perfection, along with trust remedies, all depend on meeting precise timelines. Courts have very limited discretion to extend them, even where payment is clearly owed.

Strategic coordination matters. Decisions about whether to preserve a lien, pursue interim adjudication, negotiate, or prepare for enforcement often determine whether payment is recovered at all.

Common mistakes and risks

A common mistake is waiting too long while attempting to resolve payment issues informally. By the time legal advice is sought, filing deadlines or trust remedies may already be lost, including critical steps in preservation and perfection.

Another risk is assuming that a lien is the only option. In many cases, holdbacks, trust claims, or interim adjudication may also be available when identified and pursued correctly alongside property-based security rights.

How Fridmar Law can assist

Fridmar Law helps clients assess which payment remedies are available, preserve and enforce lien claims, pursue trust claims, and coordinate recovery strategies alongside interim adjudication or litigation when required.

Our focus is on protecting leverage early, navigating statutory requirements carefully, and positioning clients for efficient recovery rather than unnecessary escalation, while safeguarding contractor payment rights.

When to speak with a lawyer

You should speak with a construction lawyer as soon as payment issues arise, not after deadlines are approaching. Early advice can help preserve lien rights, protect trust remedies, and prevent irreversible mistakes related to statutory filing deadlines.

This is especially important where projects involve multiple parties, large sums, or financial distress or insolvency, where priority and timing become critical.