CRA Lien amount more than actual owing

CRA charged a lien on the client’s home for app $200k a few years ago. The client is in process of selling the property and the actual amount owing is $110k. The lawyer is inclined to pay CRA for the lien amount and not considering the actaul owing.
is this how the process works?

That is not how it should work. Perhaps he should find a different lawyer. The lawyer needs to contact CRA to find out what the payout amount is as of the date of transfer of ownership.

1 Like

Completely agree with @obhorst - lawyer should contact Collections (will need an Authorization and/or do so in client or AuthRep’s presence) and, after settling the identification part, should be able to obtain a payout amount as of a given date. Those funds go to Trust, then to CRA. Following that CRA will release the lien. This may well hold up receipt of remaining funds and registration of title change…but CRA can actually act quickly if need be. Occasionally. Lawyer may also be able to provide an undertaking to pay on receipt of funds, which may speed things up. Depends on the collection agent, but if there’s issues…climb the ladder in the department.

(The lien will almost always be placed in a greater amount than the debt to allow for collection of legal, interest and penalty charges, as well as the originating amount of course.)

I’m sure the lawyer confirms the mortgage balance to payout on a property sale. What does he think the difference is here?

I had a similar situation a few years ago and simply did the Rep a Client inquiry for the lawyer. Since it prints dated, he accepted it and paid the amount owing. No problems were encountered with timing or lien lifting as the lawyer called CRA immediately after getting the payment proof I gave him and had my client in his office at the time to verify his identity and allow CRA to talk to CRA.

1 Like