How to Protect Your Home Purchase from Hidden Liens

A lien is a powerful legal instrument that grants creditors a claim or right over a property if a debt remains unpaid. Homeowners need to be aware of the different types of liens and their implications. In this blog post, we'll go over the various types of liens, their impact on property ownership, and common questions surrounding them.

Types of Liens:

• Notices of Security Interest (NOSIs): When you install rented or leased equipment in your home, such as a furnace, water or air filters, or smart home systems, you might enter into an agreement that allows the supplier to register a NOSI on the title of your home. While these are technically liens against the equipment rather than the property itself, their impact can be similarly significant.

• Construction Liens: Suppliers or contractors who provide renovation services or deliver home improvement materials to your property have the right to register a construction lien against it. This serves as a legal claim for unpaid work or materials, potentially impacting your property ownership.

• Tax Liens: If you fail to pay your taxes, the government has the authority to place a tax lien on your property.

• Condo Liens: As a condo owner, if you accumulate unpaid fees or fines owed to the condominium corporation, the corporation can impose a lien on your unit.

• Writs of Execution: If you fail to comply with a court order to pay a debt, the creditor can obtain a Writ of Execution or Writ of Seizure and Sale. This legal document authorizes the sheriff to seize and potentially sell any real estate you own to satisfy the debt. Although the writ is registered against your name and not directly against your property, it still places your home at significant risk.

Q & A:

How can I find out if there is a lien on a property?

A parcel register would show if any liens were registered on Title against the property. It may not show up in the legal description, but when you look at the Parcel Register in the body where the instruments are listed that's where a lien can be indicated. A Lawyer can also conduct a Title Search and through their search they would be able to find this information as well.

Who can file a lien?

Contractors, service suppliers, and the public can file a lien through small claims court or the Ontario Provincial Government if there is unpaid debt.

Can a lien on my house be removed?

Yes, a lien can be removed once the debt is paid in full. If you believe the lien is invalid, consult with a lawyer.

There are two options: the seller pays off the lien with the proceeds of the sale, or the purchaser accepts responsibility. However it is rare that a purchaser will assume the sellers debt. Unresolved liens can lead to delays or even cancellations of property sales, posing a costly expense for homeowners.  

Understanding the intricacies of liens is critical for any homeowner or prospective property buyer. At Protect Your Boundaries, we offer BoundaryPlus Property Reports, which are helpful tools for uncovering any liens that may be attached to a property. These products provide detailed insights that can reveal hidden legal claims, helping you navigate the complexities of property ownership and ensure a secure transaction.

By equipping yourself with the right information through our services, you can safeguard your investment and avoid potential pitfalls in the home buying process.

For more information on our products and services, visit www.ProtectYourBoundaries.ca