Lien Rights: To Assign Or Not To Assign (Should You Ask The Question?)

Assignment of lien is a powerful but underused section of Ontario's Construction Act. Assignment allows a party with lien rights to transfer their rights (and rights to any related court lawsuit or arbitration) to a third party. Unlike many other sections of the Construction Act that contain detailed and specific rules, the Construction Act does not provide much in the way of guidance to parties considering making or taking assignment of a construction lien, except that the assignment must be made in writing. This provides parties with broad latitude to create assignment arrangements that fit their individual needs.

What is assignment of construction lien rights?

Lien rights are a remedy available to those who supply services and/or materials to construction projects in Ontario. A party who has construction lien rights has a unique form of security for claims of non-payment in the form of a charge on the project property and on any holdbacks that are retained