Builders Lien Act Ontario 2026 Guide for Contractors

Every year, Ontario contractors leave real money on the table because they did not know their rights under the Construction Act. The 60-day window passes, the lien expires, and the unpaid invoice turns into a small claims fight you may never win.

This is what every contractor working in Ontario needs to know about builders lien rights in 2026, including the major amendments that took effect on January 1, 2026.

Note on the name: most contractors still call it the "Builders Lien Act" or "Construction Lien Act". The official name has been the Construction Act since 2019. Same statute. Same rights. Different label.

What the Construction Act actually does

It does three things, and every contractor and subcontractor should understand all three:

Holdback: forces the owner to keep 10% of every payment in reserve, so there is money to protect you if higher-up parties go bankrupt.
Liens: gives you the right to register a legal claim against the property itself if you do not get paid, even if the owner has already paid the GC.
Prompt payment: forces the owner to pay you within fixed deadlines or formally dispute the invoice in writing.

These are not nice-to-haves. They are statutory rights. The owner cannot contract around them. A clause in your contract that says "we waive lien rights" is unenforceable in Ontario.

The 10% holdback rule (Section 22)

Under Section 22 of the Construction Act, the owner is required to hold back 10% of the contract price as work progresses. Two types:

Basic holdback: 10% retained as the work progresses, released after the lien period expires.
Finishing holdback: 10% on work done after substantial performance, released separately.

Why this matters to you: if the general contractor goes under, the owner is on the hook for that 10% to subcontractors and suppliers, up the full chain. Under Section 23, an owner who failed to hold back can be personally liable for unpaid trades.

A subcontractor with a properly preserved lien gets first crack at the holdback. Contractors who slept on their rights stand behind those who did not.

New for 2026: mandatory annual holdback release

For projects lasting longer than a year, the 2026 amendments now require annual holdback release. The process:

Owner publishes a notice of annual release of holdback on a designated construction news website, using the new Form 6.
The notice must be published within 14 days of the contract anniversary.
After publication, the project parties have 60 days to preserve or perfect any lien against that year's accrued holdback.
If no lien is registered in those 60 days, the owner must release the holdback within 14 days.

For contracts entered into before January 1, 2026, the trigger for the first annual release is the second anniversary of the contract date after the amendments came into force. A contract dated March 19, 2025 will see its first annual release on March 19, 2027.

Lien preservation: the 60-day clock (Section 31)

This is the single most important deadline in the entire Act. You have 60 days from the date of your last supply of services or materials to preserve your lien.

If you miss it, the lien expires. Courts have repeatedly confirmed they cannot revive an expired lien, no matter how good your reasons.

When does the 60-day clock start?

The trigger depends on your role:

For a general contractor: the earliest of (a) the day a certificate or declaration of substantial performance is published, (b) the day you last supplied services or materials, or (c) the day the contract is terminated or abandoned.
For a subcontractor or supplier: 60 days from the last day you actually worked or delivered, or from substantial performance, whichever is earlier.

Watch out for "going back to do a small fix". Ontario courts have ruled that a quick repair trip does not reset the 60-day clock. The clock runs from the date of substantive work, not from a touch-up.

How to preserve

You preserve the lien by registering a Claim for Lien on title at the relevant Land Registry Office. The Claim for Lien is a one-page form. You will need:

The legal description of the property (not just the street address)
The amount owed
The name of the owner of record
The date services or materials were last supplied

Registration fees are modest (a few hundred dollars including paralegal time). Most contractors hire a construction paralegal to file it. The cost of a registered lien is almost always less than the amount in dispute.

Lien perfection: the next 90 days

Registering the lien preserves it. To enforce it, you must perfect the lien within 90 days from the last day you could have preserved it.

Perfection means:

Filing a Statement of Claim in court, and
Registering a Certificate of Action against the property title.

If you do not perfect within 90 days, the lien expires automatically, even if it was correctly registered.

In plain numbers: from your last day on the job, you have a maximum of 150 days (60 + 90) to take legal action. Treat 60 days as the hard wall. Inside the first 60, register. Inside the next 90, file the lawsuit.

Prompt payment: getting paid on time (2026 rules)

Ontario's prompt payment regime applies once you submit a proper invoice to the owner. From that point:

The owner has 28 days to pay the invoice in full or to issue a written Notice of Non-Payment disputing it.
If the owner pays the contractor, the contractor has 7 days to pay subcontractors.
Each step down the chain has its own 7-day deadline.

New 2026: the 7-day deficiency notice

This is the single most important change for contractors writing invoices.

Under the 2026 amendments, if an owner believes your invoice is "deficient" (missing information, wrong amount, etc.), the owner must give you written notice within 7 days of receipt identifying what is wrong.

If the owner does not respond in 7 days, the invoice is deemed proper, and the 28-day payment clock starts running regardless.

What this means in practice: silence works for you, not against you. An owner who tries to delay by claiming "we did not receive a proper invoice" three weeks later has lost that argument.

Keep your delivery records. Email with read receipts, registered mail, or the project management portal both parties use. Proof of delivery starts the clock.

Adjudication: the fast lane

Adjudication is a separate process from lien rights. Think of it as binding mediation by a qualified adjudicator. Faster and cheaper than court.

Important 2026 change: the time to initiate adjudication is now 90 days after the contract is completed, abandoned, or terminated. Before 2026, the right to adjudicate was lost once the contract was complete.

Adjudication is best for invoice disputes, change order disputes, and disagreements about set-off. It typically resolves in 30 to 45 days. The decision is binding on an interim basis until a court rules otherwise.

The Ontario Dispute Adjudication for Construction Contracts (ODACC) lists qualified adjudicators on their website.

Notice of Termination: 7 days

Another 2026 change. If a construction contract is terminated, the owner or contractor must publish a Notice of Termination on a designated construction news website within 7 days. The publication date is legally treated as the termination date, which is what starts the lien preservation clock.

If no notice is published, the lien preservation clock may still run based on the actual last day of work, but the new notice rule is the clean and protective method.

What you should do this week

If you take nothing else from this guide, do these four things:

Calendar your lien deadlines: when you finish a job, mark Day 60 in your phone. Treat it as a fire deadline, not a soft target.
Send invoices that survive scrutiny: name, address of the property, dates of work, amounts, GST/HST number. A proper invoice triggers the prompt payment clock. A sloppy invoice gives the owner room to claim deficiency.
Build a relationship with a construction paralegal, not an emergency one. The day you need a lien filed is not the day to interview paralegals. Have one in your contacts before you need them.
Document your last day of work: photos, timestamped notes, signed delivery slips. The 60-day clock starts on a specific date. You will need to prove it.

The real cost of doing nothing

The Construction Act is one of the strongest contractor protection statutes in Canada. Nothing in it is automatic. Every right requires you to act inside a deadline.

The statistic that should bother every contractor: most unpaid invoices in Ontario are never collected, not because the law was against the contractor, but because the contractor did not register a lien in time. The owner's lawyer counts on you missing the date.

For more on getting invoices paid under the new prompt payment regime, see the guide to Contractor Payment Terms Ontario.

For the full statutory text, the Construction Act is published at ontario.ca/laws/statute/90c30.

Want to know how your business handles cash flow, missed calls, and unpaid invoices compared to the average Ontario contractor? Take the free 5-minute assessment at grizzli.app/score.

This guide is general information and not legal advice. For an actual lien dispute, hire a construction paralegal or lawyer. Statutory references are to the Construction Act, R.S.O. 1990, c. C.30, as amended through 2026.