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The trouble-plagued project to build tracks leading to the TTC’s new Leslie Barns streetcar-storage facility began in 2013.Fred Lum/The Globe and Mail

In a Kafkaesque turn that is just the latest headache for people who live near the Toronto Transit Commission's Leslie Barns project, scores of innocent homeowners have unknowingly been sucked into a legal dispute over an unpaid $1.4-million bill.

A long list of property owners along Leslie Street learned on Tuesday that a subcontractor, Ozz Electric of Concord, Ont., had entered liens on their properties as it seeks to force the TTC's prime contractor on the project, Montreal-based Pomerleau Inc., to pay $1.4-million Ozz says it is owed.

The trouble-plagued project to build tracks leading to the TTC's new Leslie Barns streetcar-storage facility began in 2013. Costs had already ballooned from $14-million to $105-million when waterworks were added to the bill. Wrongly laid tracks had to be reinstalled last year.

Now, to say the least, the idea that homeowners with no contractual relationship with a company could somehow have a debt registered against their property without even knowing it was baffling to those affected.

"I am angry, and I am stressed out," said Caron Court, who lives nearby and has made complaints about the TTC project over the years. "It's the latest in a long line of difficulties we've had because of this project. It's been one after another."

The liens were entered against hundreds of properties on March 3. Liens can create problems for people looking to sell or refinance their houses. At least two affected properties, neighbours say, have either recently sold or gone up for sale.

The TTC, which said on Tuesday it was sending letters to affected homeowners, says its legal department learned of the liens by accident about two weeks ago. TTC spokesman Brad Ross said the transit's agency's lawyers have been working to get the liens removed as soon as possible. He pledged that no property sales would be affected.

Mr. Ross said the liens were registered against the properties that the TTC had obtained permission to enter for the project, which allowed crews to use portions of front yards or backyards, for example, to do their work. But he said the TTC had paid its bills, and that the dispute was solely between Pomerleau and its subcontractor Ozz.

"The resolution between the sub- and the general contractor is in the courts, not with liens against these poor innocent homeowners," Mr. Ross said.

Ozz vice-president Ron Hicks declined to speak in detail to The Globe and Mail about the dispute when reached by phone on Tuesday, saying his contract meant all inquiries must be referred to the TTC.

"It's not that cut and dry," Mr. Hicks said. "I cannot by contract comment."

Pomerleau spokeswoman Carolyne Van Der Meer, reached in Montreal, said the TTC listed all of the third-party properties in a document it was required to hand over to the main contractor at the completion of the project for publication. It was this list that prompted the subcontractor to issue the liens, she said.

She also said the dispute over the bill still involves the TTC. She said Pomerleau was not paid by the TTC for certain work performed by Ozz, meaning Pomerleau refused to pay the subcontractor.

Mr. Ross said the TTC "won't publicly litigate contractual claims or disputes they may have with us."

Shane Rayman, a Toronto lawyer who specializes in property issues, said it is not unheard of for construction companies to issue liens against neighbouring properties in a dispute over an unpaid bill.

For instance, a neighbour's contractor might do some incidental work on an adjacent property, such as remove a tree, and, if the neighbour does not pay, issue a lien against that other owner as well, he said.

But he said he had never heard of liens against uninvolved third parties on a big public-works project. "It seems like a very aggressive strategy to resolve a dispute between a contractor and a subcontractor."