What Is A Lien On A House In Canada? And Why?

Many people have never had to deal with a lien before, so it’s natural to not even know how to spell it or say it properly. Lien sounds the same as how you would say lean or mean. Some also say it as a two-syllable word, like LEE-uhn. Neither way is wrong. Now that you know how to say the word, you might still be wondering what a lien on a house in Canada even is.

What Is A Lien?

If you’ve purchased something and aren’t able to pay it off, a lien is a claim on that purchase. An example of a lien is that if you purchase a vehicle at a dealership, they will have a lien on the vehicle all the way through until the vehicle loan is paid off. If for any reason, you aren’t able to make the monthly vehicle payments, the dealership can gain possession of the vehicle with that lien that you signed off on.

What Is A Lien On A House?

A lien on a property can be thought of in the same way as a lien on a vehicle. Some people are able to use a lien in order to gain more purchasing power.

There are certain liens out there that some people might not agree to be in. One such lien is a builder’s lien. Many construction companies have a builder’s lien set in place so that they know they will be receiving payment after their job is complete. In terms of tax liens, these are also involuntary and occur if a homeowner isn’t able to pay all of the property taxes on time.

Before you go and purchase a home, you’ll want to conduct an in-depth search on the home to see if there is a lien on the home. After any outstanding debt is paid on the home, the lien will disappear and you will be on safe grounds to make the purchase.

Educating yourself on all of the details surrounding a lien will ensure you’ll be at greater peace of mind making purchases that contain liens.

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