Posting surety security to vacate or remove a registered construction lien under Ontario Construction Act s. 44 (Form 21), Alberta PPCLA s. 48, and BC Builders Lien Act s. 24.
Education only / verify at source / not legal or placement advice. Statutes, regulations, court practice, and board rules change. Global Guarantors publishes industry education — not premiums, quotes, brokerage, or legal advice. Confirm primary sources and licensed counsel before you rely on anything here.
A registered construction lien is one of the most disruptive events on a Canadian project. Once a subcontractor or supplier registers a claim for lien against title, the property owner can find that a construction lender stops advancing draws, a sale or refinancing stalls, and holdback releases freeze while everyone works out who is owed what. The underlying payment dispute may take months or years to resolve. The title problem usually cannot wait that long.
Ontario, Alberta, and British Columbia each give the parties a way to separate those two problems: post security with the court, get the lien off title, and let the claimant pursue the money against the security instead of the land. When that security takes the form of a surety bond, the industry calls it a lien bond — in some provinces you will also hear “bond to vacate,” “lien release bond,” or “bond to remove a lien.”
For contractors, lien bonds are part of the working toolkit of contract surety: they keep a project financeable while a dispute is fought on the merits. For owners and lenders, they offer a court-supervised substitute for the land as the claimant’s security. For surety brokers, they are a frequent, time-sensitive request that sits a little apart from performance and labour and material payment bonds, because the surety’s exposure follows the outcome of somebody else’s lawsuit.
This page walks through how the mechanism works in Ontario, Alberta, and British Columbia, using the statutes themselves as the source.
A lien bond is a surety bond posted with the court as security for a construction lien claim, so that the court can order the lien removed from the property’s title.
Like every surety bond, it involves three parties:
The key legal move is substitution. In each of the three provinces covered here, once the court orders the lien vacated or removed, the claimant’s rights stop attaching to the land and attach instead to the money paid into court or the security posted. The claimant does not lose its claim. It simply changes what the claim is secured against.
Because the surety still expects to be repaid by its principal if it ever pays out, a lien bond carries the same indemnity logic as other surety products. It is a credit instrument, not insurance that transfers the risk away from the contractor. (For the background, see .)
Ontario’s Construction Act, R.S.O. 1990, c. C.30, sets out the process in section 44, “Vacating lien by payment into court.” It offers two main routes.
On a motion by any person, without notice to any other person, the court shall make an order vacating the registered claim for lien (and any certificate of action) where the person bringing the motion pays into court, or posts security in an amount equal to the total of:
Because the court “shall” grant the order once the formula is met, this is the route most lien bonds are built around. The bond amount has to cover the full lien plus the costs top-up.
Illustrative arithmetic only (based on the s. 44(1) formula — not a quote or a rate):
| Lien claimed | 25% of claim | Costs security (lesser of $250,000 or 25%) | Total security under s. 44(1) |
|---|---|---|---|
| $80,000 | $20,000 | $20,000 | $100,000 |
| $400,000 | $100,000 | $100,000 | $500,000 |
| $1,200,000 | $300,000 | $250,000 (cap applies) | $1,450,000 |
The court may also vacate a registered lien on payment into court or posting of security of an amount the court determines to be reasonable in the circumstances to satisfy the lien. This is the route parties use when they argue the claim is inflated. It requires a contested motion and evidence, and the outcome is discretionary.
Section 44(3) provides a similar “reasonable amount” route where the lien does not attach to the premises and has instead been given to the owner, and s. 44(3.1) lets the court vacate a written notice of lien in the same circumstances.
In Ontario, a lien bond is not a free-form instrument. Ontario Regulation 303/18 (Forms), s. 2(20), states that a bond posted as security under section 44 shall be in Form 21, titled “Financial Guarantee Bond under Section 44 of the Act.” The regulation’s form table lists the current version of Form 21 as dated 2025/11, so anyone working from an older precedent should check that they are using the current version.
Letters of credit are also used as section 44 security. Section 44(5.1) confirms that a letter of credit referring to an international commercial convention is acceptable if the convention text is written into the credit and the credit is unconditional and accepted by a Schedule I bank operating in Ontario.
Several parts of section 44 matter once the lien is off title:
Alberta’s Prompt Payment and Construction Lien Act, RSA 2000, c. P-26.4 (PPCLA), handles the same problem in section 48, “Lien removed.”
Under s. 48(1), the court may, on application, order that the registration of a lien be removed from title where security is given or payment is made into court for one of the following:
plus any costs the court may fix. Section 48(1) also allows removal where the relevant lien fund has been paid out under the Act, or on any other ground the court considers proper.
Two differences from Ontario stand out. First, Alberta frames the order as discretionary (“may”) and leaves costs to the court rather than setting a fixed percentage. Second, the statute also allows security for the maximum amount the lien can properly attach to, which matters for claimants below the contractor: sections 18(3)–(4) and 23(3)–(4) limit what their liens can attach to, broadly the 10% holdback plus amounts due and unpaid to the party that engaged them.
After removal, s. 48(2) provides that the money or security:
That last point is worth repeating to Alberta owners: posting a lien bond does not, by itself, release the statutory holdback.
Section 48 also gives the paying side a tool to test the claim. Under s. 48(3)–(4), after an application is served, a party may file and serve a notice to prove lien, and the lienholder must file an affidavit with detailed particulars of its lien within 15 days of service. Separately, s. 45(2) provides that the usual requirement for a lienholder to register a certificate of lis pendens after a notice does not apply where security has been given or payment made into court and the lien has been removed from title.
The King’s Printer office consolidation used for this page is marked current as of April 1, 2025. Check for later amendments before relying on the section numbers.
British Columbia’s Builders Lien Act, SBC 1997, c. 45, uses the language of cancellation. Section 24, “Cancellation of claim of lien by giving security,” works this way:
BC also offers a separate, holdback-based route in section 23, which lets a party have claims of lien removed by paying into court the lesser of the total claims of lien filed or the amount owing (subject to the holdback floor — what the Act calls the total amount recoverable). In that case the money stands in place of the improvement and the land, and the order must provide for removal of the liens from title. Section 25 separately lets a court (or, for some grounds, the registrar) cancel a claim of lien that has been extinguished, dismissed, discontinued, or satisfied, or that the court finds vexatious, frivolous, or an abuse of process.
The BC Laws version used for this page is marked current to September 22, 2026.
| Question | Ontario — Construction Act s. 44 | Alberta — PPCLA s. 48 | BC — Builders Lien Act s. 24 |
|---|---|---|---|
| Statutory language | “Vacating” a lien | “Removing” a lien from title | “Cancelling” a claim of lien |
| Court’s role | Must vacate if the s. 44(1) formula is met; may vacate on a reasonable amount under s. 44(2) | May remove; discretionary | May cancel after considering all relevant circumstances |
| Security amount | Full claim plus the lesser of $250,000 or 25% for costs (s. 44(1)), or a court-set reasonable amount | Claim amount, the maximum the lien can properly attach to, or a lesser court-set amount, plus costs the court fixes | Security satisfactory to the court; may be less than the claim |
| Bond form | Prescribed: O. Reg. 303/18 Form 21 | Not prescribed in s. 48 — check court requirements | Not prescribed in s. 24 — check court requirements |
| Effect on security | Lien becomes a charge on the security, shared by all lien claimants under s. 80 priorities | Security stands in place of the land for the removed lienholder | Claim of lien cancelled on title; claimant pursues the security |
| Holdback effect | For holdback purposes the owner is treated as if the lien had not been preserved | Holdback retention obligations are unchanged | Owner’s liability stays capped by s. 34 |
Lien bonds are easy to confuse with the other bonds that sit around the same statutes. Ontario’s forms regulation is a useful map, because it prescribes several distinct instruments:
Outside Ontario, the same distinction applies even where the forms are less prescribed: a performance or labour and material payment bond is placed before trouble starts as part of the contract, while a lien bond is placed after a specific lien is registered, to answer that lien.
What follows is general industry practice, not a statement of any particular surety’s requirements. Terms vary by surety, principal, and dispute.
Retrieved or confirmed 2026-10-07 (PT).
