Municipalities should brace themselves for further amendments to the construction law regime in Ontario. Effective October 1, 2019, lien claimants will no longer be required to register a lien against property owned by a municipality. This change will affect contracts between contractors and municipalities in the province of Ontario, regardless of the date the parties entered into the contract.<\/p>\n
It has long been the case that lands owned by the federal and provincial governments could not be subjected to a lien. Rather, a charge would apply in favour of the lien claimant on those amounts retained under the holdback provisions.<\/p>\n
From a policy perspective, it is easy to understand why liens do not attach to Crown lands. The Crown is required to pay all final judgments against it. The security that the lien provides when it attaches to land (i.e. the power to order a sale of the land) is unnecessary because there is no risk of non-payment at the conclusion of proceedings.<\/p>\n
After years of consultation with various stakeholders, the provincial government has now amended the Construction Act<\/em> (the \u201cAct\u201d) and its regulations as they relate to municipalities. Effective October 1, 2019, a lien will not attach to a municipality\u2019s interest in lands. Municipalities cannot become bankrupt and, therefore, the additional security of registering a lien is unnecessary.<\/p>\n As a result of this legislative change, lien claimants will no longer be required to register a lien against lands owned by a municipality. Instead, a copy of a claim for lien shall be given to the clerk of the municipality, which claim will constitute a charge upon the holdbacks required to be retained by the municipality.<\/p>\n The exemption to municipal lands is a welcome change to the Act. <\/em>The Legislature has made it clear that municipal lands should not be subject to court-ordered sales. Further, any concerns from contractors and subcontractors will be allayed. The giving of a claim for lien will trigger obligations under the Act and it will provide security to lien claimants without the costs of registration.<\/p>\n Under the new amendments to the Act, a municipality may provide a method or methods for the giving of a copy of a claim for lien by publishing a statement on its website. These methods include:<\/p>\n