Liens, Permits, and Warranties
A lien is a legal notice that someone is claiming the right to be paid from the value of your property. If your contractor does not pay suppliers or subcontractors for materials or work on your project, you could end up with a lien on your property title or deed. If that happens, you will probably be unable to renew your mortgage or sell your home until the lien holder has been paid and the lien removed.
Paying your contractor on time is no guarantee against a lien; if the contractor fails to pay subcontractors for materials or labour, a lien can be placed on your property.
How can you protect yourself? Lien laws are provincial, and vary across Canada, but all require that you hold back a portion of the total job cost (usually 10% to 15%) for 30 to 45 days after the work is completed. During this time, suppliers and/or subcontractors who did not get paid must register their liens with the courts. Your financial liability is limited to the amount of the holdback. Before you pay your contractor this final holdback payment, check with your land registry office to ensure that no liens have been registered against your property.
For more information, contact your provincial Consumers’ Affairs or Protection office and ask about applicable lien requirements where you live.
Every province has building codes that are enforced by municipalities and utilities, such as electricity and natural gas providers. Before you start your project, it's important to understand how permits and inspections work.
Generally, a building permit is required for any work on your home that involves its load-bearing structure or that could affect the health and safety of occupants. Depending on the nature of your project, you may also need one or more of these permits:
- Electrical permit: For wiring in a new home or changes to the electrical system in an existing home.
- Plumbing permit: For plumbing in a new home or repairs or alterations to a home's existing plumbing.
- Gas permit: For new heating systems or other installations that use natural gas or propane, or for changes to these systems.
Non-structural work, such as replacing shingles or flooring, often does not require a permit. Some work, like replacing windows, may or may not require one, depending on where you live and the exact nature of the work being done. If you’re not sure, call your municipal building permit office and describe your project. If a permit is required, you’ll likely be asked to bring drawings of your project to the municipal office.
Who’s Responsible for the Permit?
As the property owner, you are responsible for complying with all permit requirements for your project. When you and a contractor draw up your contract, you can specify that the contractor will obtain necessary permits and arrange for inspections on your behalf. If you don’t specify this in your contract, you are responsible for obtaining all necessary permits and inspections. If a project does not comply with building, electrical, plumbing or gas codes or municipal zoning requirements, your municipality or a utility can then force you to correct deficiencies in the work or demolish it.
What if a contractor suggests that you can "skip the permit" because no one will notice the work being done? Look for another contractor.
Professional contractors provide a clearly-defined warranty on materials and workmanship, and set this out as part of the contract. Make sure this is included. Verbal assurances that a contractor will "come back and fix anything that goes wrong" are very difficult to enforce after the job is finished.
The contractor’s warranty should cover the quality of the installation or construction work done, specifying what is covered and for how long. Manufacturers of products used by the contractor warrant their products to be free from defects for a specified length of time if they were installed in accordance with the manufacturer's instructions. Your contractor should provide you with the manufacturers’ warranty documents on products and materials used in your project – make sure to get these.
The warranty provisions in your contract should also state how you can access warranty service from your contractor – contact details for any needed follow-up service.