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Bulletin | Resource

The Ontario Construction Lien Act: An Overview

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Ontario Construction Lien Act Excerpt

"Construction lien rights are strictly a creation of statute law, and have been amended over the years to gradually broaden their extent and the types of persons entitled to assert such rights, as contractual arrangements in the building industry and construction process have become more and more sophisticated and complex. The best way of viewing such contractual arrangements is as a pyramid, with the owner or developer at the top, entering into an agreement with one or more general contractors for the construction of the property improvement. Each general contractor in turn enters into an agreement with various subcontractors for work in various categories of improvement such as, electrical, mechanical, structural, etc. Each subcontractor in turn hires other subcontractors, labourers and suppliers of specific materials and services for the benefit of the improvement."

"...[P]ayment of monies under the various contracts in the “pyramid” is made by a “trickle down” from owner to suppliers until, ultimately, all persons have been paid for their services and materials. In the absence of legislation, a supplier can only look to the person with whom he directly contracts for payment. The Construction Lien Act permits recovery from those up the pyramid who are not in “privity of contract” with the claimant."

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