How do I handle liens or unpaid taxes on a
property?
“How do I handle liens or unpaid taxes on a property?” — Here’s the straight answer you need before you sign.
Why this matters: a lien or unpaid tax can wipe equity, block closings, or trigger a municipal tax sale in Milton. If you want clean title and no surprises, follow the checklist below.
Why you should read this now
- If you’re buying, selling, or refinancing in Milton, Ontario you must know how liens and unpaid taxes work.
- Local rules and priorities determine who gets paid first and whether the municipality can force a sale.
- A missed step costs you thousands or the whole deal. Be decisive. Move fast.
What a lien or unpaid tax does to your deal
- Freezes clear title: lenders and buyers won’t close on a property with unresolved encumbrances.
- Adds payoff amounts: penalties, interest, legal fees and discharge costs stack up quickly.
- Changes priority: some liens beat mortgages depending on when they registered.
- Risk of tax sale: persistent unpaid municipal taxes can lead to tax sale or vesting under municipal powers.
Common types of liens and unpaid tax claims in Milton
- Municipal property tax arrears (Town of Milton / Halton Region): the town can register charges against the property for unpaid taxes and apply municipal collection procedures.
- Mortgage liens: registered charges from banks or private lenders. These almost always take priority over later claims.
- Construction liens (Construction Act): contractors, subcontractors and suppliers can register liens for unpaid work. These can kill a sale unless dealt with.
- Court judgments and writs: judgment creditors can register against title.
- Federal or provincial tax claims: CRA or provincial tax authorities may take action against property owners. These claims are serious and need immediate attention.
A clear, no-nonsense playbook to handle liens and unpaid taxes in Milton
1) Do a full title search immediately
- Order the current title report from Ontario land records (Teranet/LRO). Look for any registered charges, liens, or certificates.
- If you’re buying, insist your real estate lawyer does this before final offer acceptance. No title search = avoidable risk.
2) Get a municipal tax certificate and ledger
- Request a tax certificate from the Town of Milton or Halton Region. It lists outstanding municipal taxes, penalties and utilities tied to the property.
- Buyers typically require a tax certificate at closing. Sellers must clear or disclose balances ahead of time.
3) Identify who holds each lien and the registered priority
- Priority is usually by registration date. Mortgages and earlier liens often have precedence over later claims, but tax and construction law quirks can change that.
- Your lawyer will identify the holder, contact details and the exact payoff figure to discharge.
4) Calculate the exact payoff amount and what’s negotiable
- Municipal taxes: the town will give a payoff figure. These often include late penalties and costs.
- Construction and judgment liens: lien holders typically want full payment but may accept a negotiated settlement for less if you move quickly.
- Mortgage holders: require full payoffs unless you arrange a subordination or refinance.
5) Negotiate, settle or bond the lien
- Negotiate payment terms or a reduced settlement. Use documented offers and receipts.
- For construction liens, contractors are often comfortable with an escrow or holdback at closing secured by solicitor trust until matters are resolved.
- In complex cases, your lawyer can obtain a court order discharging a lien or order that it be secured by a bond.
6) Use escrow at closing to protect buyer and seller
- If a lien holder agrees to wait for funds, escrow holdbacks are straightforward: the closing lawyer holds money until lien discharge paperwork arrives.
- This protects buyers from paying into a property with outstanding claims and allows sellers to complete the sale.
7) Obtain discharge documents and confirm registry removal
- Always get a legal discharge or release in writing and registered at the Land Registry Office. Phone promises aren’t enough.
- Your closing lawyer must confirm the lien is removed from title before registering the new deed or mortgage.
8) When negotiations fail: litigation or tax sale defense
- If a lien holder won’t negotiate, legal steps can force resolution. A court can set aside fraudulent or invalid liens, or approve a sale with proceeds distribution.
- For municipal tax sales, act fast. There are statutory processes the municipality follows. Contest or cure arrears before the municipality proceeds.
Real Milton example scenarios (what I see every month)
Scenario A — Buyer finds municipal tax arrears during contract stage
- Action: buyer’s lawyer orders a tax certificate, negotiates a seller payoff or escrow holdback. Closing proceeds when the town issues a discharge or funds are held in trust.
Scenario B — Construction lien appears days before closing
- Action: demand verification and lien claim details, negotiate a reduced payoff or place holdback. If lien is unproven, lawyer may apply to remove it by motion.
Scenario C — Judgment creditor registered years ago but not paid
- Action: verify priority vs mortgage. If judgment has priority, proceeds at closing must address it. Lawyer arranges discharge or a settlement deal.
Why local knowledge matters in Milton
- The Town of Milton and Halton Region have specific procedures and staff contacts. Knowing the right department speeds up tax certificates and payoff confirmations.
- Local contractors and attorneys are known quantities. Knowing who negotiates fairly saves time and money.
- I’ve closed deals in Milton where proper local steps reduced a six-figure exposure to a manageable settlement.
How I handle this for sellers and buyers in Milton (what I do differently)
- Rapid title triage: the moment a property is listed or an offer is accepted, I order title and tax reports.
- Local network: I work with Milton-savvy real estate lawyers and municipal contacts who get fast responses from the Town of Milton tax office.
- Practical negotiation: I don’t let technicalities drag deals. I push for escrow, structured settlements, or court solutions if needed.
Cost and timeframe expectations
- Costs vary: lawyer fees, discharge fees, settlement amounts and possible court costs. Expect a minimum of a few hundred in professional fees; significant lien payoffs run into thousands.
- Time: simple discharges and holdbacks can close in days. Construction liens or contested claims can take weeks or months if court intervention is required. Act immediately.
Red flags that require immediate action
- Title shows recent registration of a lien within the last 90 days.
- Multiple liens of different types (tax + construction + judgment): priorities get messy fast.
- Seller refuses to provide tax certificate or cooperate with clearing the title.
Bottom line
Liens and unpaid taxes are solvable if you act fast, use the right legal help, and leverage escrow or negotiation tools. Local expertise makes the difference in Milton. Don’t gamble with title—triage it.
Contact for Milton real estate legal & documentation help
If this property is in Milton and you need a local pro who moves fast and gets clear title done, contact Tony Sousa. He works with the town, local lawyers, and has closed tough liened deals.
Email: tony@sousasells.ca
Phone: 416-477-2620
Website: https://www.sousasells.ca
FAQ — concise, practical answers buyers and sellers ask
Q: How do I know if a property has liens or unpaid taxes?
A: Order a title search and a municipal tax certificate. Your real estate lawyer or agent should pull these before you finalize an offer.
Q: Can I buy a house in Milton with a lien on it?
A: Yes, but the lien must be cleared or accounted for at closing. Common solutions: seller payoff, escrow holdback, negotiated settlement, or court resolution.
Q: Who pays municipal tax arrears at closing?
A: Typically the seller, but buyer and seller can negotiate. Buyers usually insist on a zero-balance tax certificate or escrow holdback.
Q: What happens if municipal taxes aren’t paid?
A: The municipality can register charges and, over time, pursue tax sale procedures. Don’t ignore notices—respond immediately.
Q: How fast must I act if a construction lien appears?
A: Immediately. Construction liens have strict timelines and can be defended, negotiated, or bonded. Delay increases costs and risks.
Q: Will my lender allow closing with unresolved liens?
A: Most lenders require clear title or acceptable holdback/discharge arrangements. Inform your lender and your lawyer early.
Q: What if the seller claims the lien is a mistake?
A: Require documentation and a registered discharge before closing. If unproven, your lawyer can challenge the lien.
Q: How can I avoid liens and unpaid tax problems when buying?
A: Use a local agent and real estate lawyer, order a title search and tax certificate, and insist on contract protections and closing conditions.
Q: Can a lien be removed without full payment?
A: Sometimes, via settlement, court order, or bond. You need legal counsel to evaluate options.
Q: Where can I get a tax certificate in Milton?
A: Request it from the Town of Milton tax office or have your lawyer order it as part of closing documentation.
Need a Milton expert who gets results
Stop guessing. If you’re buying, selling or refinancing in Milton and face liens or unpaid taxes, call Tony Sousa. Fast decisions, local contacts, and clean closings.
Email: tony@sousasells.ca | Phone: 416-477-2620 | https://www.sousasells.ca
