Hope us get unencumbered.

January 28, 2010 6:27 PM

How do liens on property work in Ontario (the Canadian one)?

A group of us are creating an incorporated nonprofit organization to promote (a) art and culture in our area, and (b) paintball. (Yes, it's weird.) One of our founding members owns the property where the activities related to the nonprofit will take place. The org is tentatively planning to purchase the property from the member for $1 -- but, there's a lien against the property by Ontario's Legal Aid society (unpaid legal bills from family court appearances ?? -- we're trying to stay away from that morass of complication as best as we can, and just buy the damn land).

My question is, what limitations do liens place on a property? My assumption is that the lien must be paid off before the property can be sold, but my Google-fu is completely failing me here. Lots of sites are more than willing to help me place a lien on property, but few are willing to explain how to resolve a lien, or what implications it has for purchasing an encumbered piece of property. The property in question is probably not worth a huge amount of $$ -- say, south of $30K, if that figures in at all.

Sorry for the n00bishness of this question; it's embarrassing that I can't find this answer with out MeFi's help.

posted by liquado to law & government (4 answers total)

The Law Society of Upper Canada provides a free Lawyer Referral Service that includes a (also free) half-hour consultation with a lawyer in the desired field (i.e., real estate). If you can't find an answer here - and I would caution you very strongly about relying on anonymous legal advice - that might be a good next step.
posted by Clandestine Outlawry at 8:05 PM on January 28, 2010

The lien must be removed by legal aid - either because it has been paid or the owner negotiates with them and they agree to remove it (highly unlikely). The title cannot be transferred until the lien is removed. Can you rent the property for a dollar a year until he resolves this (this may bring different insurance and liability questions).

This really falls back to the same "see a lawyer". They gots all that edumacation for a reason.
posted by saucysault at 8:05 PM on January 28, 2010

In case this help, this is the payment agreement that was agreed to:
have a lien put on your house or property. The lien says that you will pay Legal Aid back when you sell or refinance your house, when you renew the mortgage on your house or within five years, whichever comes first.
I hope the amount isn't too onerous to pay off and you can eventually buy the land.
posted by saucysault at 8:24 PM on January 28, 2010

It's true that you cannot take title to the property while it is liened - the property cannot be sold. In Ontario construction liens must be set down for trial within two years or they are lost, and a similar provision may apply (I don't know) for this type of lien, so you should get a lawyer to look into how long this property has been liened and what statutory provisions apply in your case.
posted by Dasein at 8:36 PM on January 28, 2010