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Before you buy something valuable like real estate, a used car or a collector’s item, check if it has a lien on it. Here’s how liens work and how to check.
A lien is a legal claim on something you own, like personal property or real estate. Liens arise from loans for which the property was used as collateral. A lien effectively guarantees the payment of the debt. If the borrower fails to repay the loan, the lien holder can force the sale of the property to get their money back.
It’s recommended that consumers check for liens before buying used cars, boats, furniture or other items from private sellers. If an item was originally purchased with a loan that has not been repaid, the lender may have a claim on it—which you’ll want to have removed before buying. Each province has a website where you can check for liens on personal property. For example, in Ontario, you can conduct a lien search using Service Ontario’s Access Now service.
Liens can also be registered against your home by contractors you haven’t paid on time, or taxation authorities such as Canada Revenue Agency (CRA) or your local municipality, for unpaid taxes.
Example: “Home owners may be surprised to discover liens registered against their properties by dishonest door-to-door salespeople offering home renovations or other services.”
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