Liens and impacts to mortgages

A lien is a legally registered claim against your property, as a security against payment for services or materials (in Ontario, liens related to HVAC rental agreements are called a Notice of Security Interest).

They can be an unpleasant surprise that you only discover when you need to make some sort of change to your mortgage. For example, recent clients had multiple liens on their property from their HVAC rental providers. No lender is willing to put a mortgage after a lien in terms of payout priority, and the financing couldn’t be completed until all parties involved were satisfied. This involved a lot of extra work, increased legal costs, and took over 2 extra weeks to complete (which can be a big issue if clients need their money by a certain date). Liens can also complicate things when selling your home - you may need to settle them before you can complete the sale.

What can be done if this happens to you? In all cases we suggest legal advice for guidance, but here are some possibilities: the most straightforward is to pay out the amount owing. If you feel it is unfairly/improperly registered, you can push back to have the amount reduced or even erased (may require small-claims court).

Or like in our case, you can work with the lien holders to have the positions adjusted and go behind the new mortgage. Happily for our clients, all parties agreed on this solution, and we were able to work around the issue.

To check for liens against your property, you can often perform a search through your province’s land registry (may require a small fee e.g. Services Ontario), or consult with a lawyer. Contact us if you’d like to know more.