What is Construction Liens

Question

What is Construction Liens (Mechanics' and Builders’ Liens)? 

Answer 1

Persons who have extended credit in the form of goods and services to improve land have a statutory right to record a security claim against the land that they have improved. If the claim of the lien holder is not paid, the lien holder may be able to cause the land to be sold and can receive payment from the sale proceeds.

A mechanics' lien is available, under most provincial acts, only to creditors who participate directly as workers or supply material for use directly in construction. The courts have held that an architect who prepares building plans is entitled to a lien. Ontario’s Construction Lien Act and some other provincial statutes entitle a lesser of equipment used in construction (but a seller of such machinery or tools is not entitled).