A Mechanic’s Lien allows a claimant (such as a contractor, subcontractor, or supplier), who is providing labour or materials for another party, to establish a legal claim for their labour and/or supplies in the case of outstanding payments. When a contractor or supplier files a lien, they gain a security interest in the property which can ensure the property owner or hiring contractor pays them.

A filed Mechanic’s Lien form obstructs a property’s land title which prevents the owner from selling their land until they pay the claimant. Ultimately, if you’re a contractor or supplier who is owed payment, a Mechanic’s Lien can protect your financial interests. Once you are paid for your work or materials, you must cancel the lien through a Lien Release.

A Mechanic’s Lien is also known as a:

• Contractor’s lien
• Labourer’s lien
• Construction lien
• Builder’s lien

Also known as the lienor or lienholder, the claimant is the person seeking to apply or claim the Mechanic’s Lien. Generally, claimants can be any party who was hired to provide services or materials for the construction, maintenance, or repair of a property.

Some people may argue that there are different variations of Mechanic’s Liens and be inclined to differentiate between types based on the creator’s profession, such as supplier versus architect. As such, some people may say that “Mechanic’s Lien” is a general term and there are more specific versions, such as:

• Supplier’s lien
• Materialman’s lien
• Designer’s lien
• Artisan’s lien

Ultimately, these examples are still Mechanic’s Liens, and they all function in the same way. Differentiating between these types is a personal preference.

Depending on your province, simply creating and filing a Mechanic's Lien may not be enough to establish your legal claim. In Canada, you may have to provide hiring contractors and property owners with specific notices before or after filing a lien. Therefore, your process to properly create and file a lien will vary depending on your province’s laws.

In addition to checking your province’s requirements, follow these general steps to ensure your lien’s legal enforceability:

1. Provide a pre-lien notice

A pre-lien notice informs the hiring party (and any other relevant parties) of your involvement in a specific project. For example, if a general contractor hires you to provide specialized services for a renovation project, a pre-lien notice would inform the property owner and the general contractor that your contribution has begun.

A pre-lien notice (also known as a preliminary notice) would be sent around the time that you first provide services or materials to a hiring party. You may be required to have provided this notice in order to file a lien.

2. Provide notice of intent to lien

A notice of intent to lien notifies the property owner and any other hiring party that you intend to file a Mechanic’s Lien if the appropriate party doesn’t pay you. You may be required to send a notice before filing a lien.

Ideally, through sending a notice and giving the owing party a chance to rectify the situation, you can secure the payment that you earned and avoid filing the lien.

3. Create and file the lien

Once you’ve given the property owner and all other relevant parties any required notice, you can create a Mechanic’s Lien and file it with the relevant office. You must file a Mechanic’s Lien in the same jurisdiction where the property is located.

4. Notify and serve the property owner

Once you’ve created and filed the lien, you may need to notify and serve the property owner with it. Upon filing with the appropriate office, you should receive a copy of the lien. Provide the property owner with a copy of the lien as soon as possible, either in-person or by mail. In some provinces, you may have to provide your hiring contractor with a copy of the lien as well.

5. Release the lien or seek legal action

If the property owner or hiring party pays you to satisfy the lien, you must cancel the lien with a Lien Release. Failure to quickly release the lien may result in a financial penalty.

If the hiring party still doesn’t pay, then you may seek legal action to enforce the lien. In this case, you may require the assistance of a lawyer. Through seeking legal action to enforce a Mechanic’s Lien, a court could foreclose on the property, meaning it would recover the amount you are owed by taking ownership of the property and selling the property.

The main purpose of the Mechanic’s Lien is to financially protect contractors, subcontractors, and suppliers when they provide services or materials for a hiring party. By filing and securing a legal claim against a property, you can prevent the property owner from selling it until you’re paid and the lien is resolved. A Mechanic’s Lien prevents a property sale by obstructing the land title from being clear.

For preventative protection, contractors, subcontractors, and suppliers can protect themselves with an Independent Contractor Agreement or Sales Agreement to set the terms.

Create a Mechanic’s Lien with LawDepot’s template and provide the following information:

• Property details: Specify where the property in which you provided services or materials is located and provide a property description.
• Party details: As the claimant (lienor), provide your name and address. In addition, provide names and addresses for the owners of the property in which you provided services or materials.
• Date of service: If you worked on a property or provided building materials, specify the start and end date of your service.
• Work description: Provide a description of the labour and/or materials that you provided. Consider attaching the original work contract to the lien. In addition, consider attaching an itemized list of the labour that you performed or the materials that you provided.
• Price details: As the claimant (lienor), state the amount that you are owed.

Generally, you should be able to obtain the legal land description for the property in which you provided services or materials from your jurisdiction’s relevant land title office.

Ideally, notifying the hiring party that you will create a Mechanic’s Lien due to outstanding payment will motivate them to remedy the situation as quickly as possible. By working with them, and possibly giving them extra time to pay you, you may be able to avoid having to enforce your lien.

If the hiring party refuses to pay you after you give them adequate notice of the owing amount and your intent to lien, you may have to file your case in court. The court will determine the merits of your claim and determine if and how the lien will be enforced. For example, a court may determine that the property will be sold to pay you.

Any contractor, subcontractor, tradesperson, or supplier who is owed money for providing work or materials to a hiring party, such as a homeowner or general contractor, should consider creating a Mechanic’s Lien to protect their own financial interests. Any of the following professionals may find a Mechanic’s Lien useful:

• General contractor
• Carpenter
• Drywall installer
• Framer
• Electrician
• Painter
• HVAC specialist
• Roofer
• Landscaper
• Plumber

Generally, the claimant (lienor) should file the lien. However, if you’ve created a Power of Attorney in which you’ve appointed an agent to act on your behalf, your agent may file your Mechanic’s Lien.

Generally, a property owner can object to your lien claim in court. In this case, the court will determine the validity of your lien claim by examining the available evidence and possibly taking a deposition from all relevant parties.

Check the laws regarding Mechanic’s Liens in the property’s area to discover an owner’s rights to fight a lien.