A Canadian Lien Release Form is a legal document used by a contractor, subcontractor, or material supplier to discharge a construction lien that was previously registered against a property. Construction liens (known as builders’ liens in some provinces) are statutory security interests that arise when a person who provides labour, materials, or services for an improvement to land has not been paid. The lien release confirms that the lienor has received satisfactory payment and voluntarily releases the claim against the property.

Construction lien legislation in Canada is governed at the provincial level. Ontario’s Construction Act (R.S.O. 1990, c. C.30, as amended) provides the framework for filing, preserving, and perfecting construction liens in Ontario. The Act was significantly amended in 2018 to introduce prompt payment requirements and mandatory adjudication processes. British Columbia’s Builders Lien Act (S.B.C. 1997, c. 45) governs construction liens in that province and establishes a 45-day deadline for filing a lien after substantial completion of the contract. Alberta’s Prompt Payment and Construction Lien Act (S.A. 2020, c. P-26.4) replaced the former Builders’ Lien Act and introduced prompt payment obligations similar to Ontario’s reforms.

The lien release is essential for clearing title to the property. When a construction lien is registered on title, it encumbers the property and can prevent the owner from selling, refinancing, or mortgaging the property until the lien is removed. A properly executed lien release, once filed at the appropriate land registry office, removes the encumbrance and restores clear title to the property owner.

A Canadian Lien Release Form is needed whenever a construction lien has been registered against a property and the underlying debt has been satisfied through payment or settlement. The most common scenario is when a general contractor, subcontractor, or material supplier has completed work on a construction project and receives full payment for all labour, materials, or services provided. Upon receipt of payment, the lienor is obligated to discharge the lien.

The form is also needed when parties reach a settlement of a construction lien dispute. If a lien was filed due to a payment dispute and the parties subsequently negotiate a resolution, the lienor must file a release to remove the lien from the property title. This is particularly important in Ontario, where the Construction Act establishes a formal adjudication process for construction disputes and the construction court has jurisdiction over lien claims.

Property owners often require lien releases as a condition of closing a real estate transaction. When a property with a registered lien is being sold, the buyer’s lawyer will typically require that all liens be discharged before closing. Similarly, mortgage lenders will not advance funds on a property with outstanding construction liens. In these situations, the lien release serves as proof that the construction debt has been settled and the property is free of encumbrances.

An effective Canadian Lien Release Form must contain several critical elements. First, it must identify the province and municipality where the release is being executed, as construction lien law is provincial in nature. The form must clearly identify the lienor by full legal name and address, and specify the amount of payment received in consideration for the release.

The nature of the lien must be described, specifying whether it arose from labour, materials, services, or a combination thereof. The property owner who received the work must be identified, along with the construction project by name and address. The lien registration details are essential: the registry office where the lien was filed, the instrument or registration number, and the date of filing. These details allow the land registry to match the release to the original lien registration.

The release clause must be clear and comprehensive, stating that the lienor waives all rights and claims under the applicable provincial construction lien legislation. If required by the provincial registry, the form should include a sworn statement (affidavit) or a notary acknowledgment. The governing province should be specified to clarify which legislation applies. The form must be signed and dated by the lienor, and in some provinces, witnessed or sworn before a commissioner of oaths or notary public.