You can sell a house with a lien on it in Ontario. A lien does not block you from listing or accepting an offer, but it has to be cleared before the sale can close, and in most cases it gets paid out of your sale proceeds on closing day.
A lien is a claim registered against your title that secures money someone says you owe. Several kinds show up in Ontario. A contractor who was not paid can register a construction lien. A creditor who sued you and won can file a writ of execution against your property. The Canada Revenue Agency can register a claim for unpaid tax, the City of Toronto can have priority for unpaid property taxes, and a condominium corporation can register a certificate of lien for unpaid common expenses. Once registered, any of these behaves much like a mortgage does, sitting on title until it is discharged.
Most sellers only learn about a lien once a deal is signed, because the buyer's lawyer runs a title search and finds it. You do not have to wait for that. Title is public record in Ontario and a lawyer can check it for you well before you list, which is worth doing if you have had a renovation dispute, a judgment against you, or tax arrears of any size.
Clearing one is usually mechanical. Your real estate lawyer directs enough of the sale proceeds to the claimant, gets a discharge, and registers it so the buyer receives clear title. Where the amount is genuinely in dispute, funds can be held in trust while the argument continues. Timing varies by type. Construction liens follow strict deadlines under the Construction Act, preserved within 60 days and perfected within 90 days after that, so some expire on their own. A condominium corporation's lien expires three months after the default unless it registers. Writs are slower to remove, since withdrawal goes through the local sheriff's office and can take a month or more.
The real risk is arithmetic. If your mortgage and the registered claims together exceed what the house sells for, you would need to cover the shortfall in cash at closing, because no buyer's lender will advance funds against unclear title.
Related reading: What Is a Condo Lien and How Does It Work in Ontario?, What Is a Statement of Adjustments in Ontario Real Estate?, and What Documents Do You Need to Sell a House in Ontario?