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Condominium Governance

Case Study | Mar 18, 2015

The Problem

Our client, a residential Condominium Corporation, was owed unpaid common expenses on one of the condominium units. Despite many notices and opportunities for the owner to bring her common expense account into good standing, she did not do so, and had abandoned the unit. Under section 85 of the Condominium Act, if an owner defaults in payment of common expenses, the Condominium Corporation can register a lien against the owner’s unit and its proportionate share of the common elements “for the unpaid amount together with all interest owing and all reasonable legal costs and reasonable expenses incurred by the Corporation in connection with the collection or attempted collection of the unpaid amount.” Under section 85(6) of the Act, the lien may be enforced in the same manner as a mortgage. Usually, the owner or its mortgagee will pay the lien amount in full. However, that did not happen in this case.

Our Approach

A lien expires three months after the default occurred, unless the Corporation registers a Certificate of Lien against the unit within that time. We therefore quickly served notice of the lien and registered it against the unit. When the lien amount was not paid, we were able to enforce the lien under section 85(6) like an unpaid mortgage, and sold the unit.

The Result

We sold the unit to a third-party purchaser and ultimately applied the sale proceeds to reimburse the Condominium Corporation in full, not only for the unpaid common expenses and interest, but also its carrying and repair costs of the unit, unpaid property taxes on the unit, real estate commission paid to sell the unit, and all of its legal costs and other expenses incurred in the enforcement of the lien. The balance owing was paid to the original unit owner.

© 2015 Lawrence, Lawrence, Stevenson LLP

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