Condo Arrears- Management Mistakes
Condo Managers involved in the collection of common expense arrears may want to stay clear of the following condo arrears mistakes:
- Missing the three month period to secure the arrears by registration of the lien.
Reasons: Sympathy for the unit owner who needs more time to pay the arrears or are just too busy and didn't get the information over to the lawyers in time.
- Issuing a clear Status Certificate when there are arrears.
Reason: Unit owner promises to pay the arrears and the manager accepts that promise. Later finding that the unit owner did not pay and the unit has been transferred to a new owner.
- Relying on an existing lien to secure new arrears eventhough all previous arrears had been paid in full, without advising legal counsel.
Reason: Misunderstanding of what the lien secures and doesn't want to contact legal counsel to ask.
- Form 14 (pre-notice of lien) deficiencies without serving the proper addresses or failing to serve the form in time so that the lien can be registered prior to the end of the 3rd month.
Reason: Too busy to get it done in time and doesn't want to contact legal counsel to ask.
All this to say that these mistakes may result in management picking up the tab. It is best to follow a procedure which outlines steps to be taken when a unit owner is in arrears. Click the following link for a sample Collection Policy.
Comments (1)
Read through and enter the discussion by using the form at the endAnthony Friend - April 16, 2012 3:51 PM
The above advise concerns process in establishing a lien without ethical considerations. This would be the case when an owner claims that the 'arrears to the Corporation' is not bona fide.
A real case in point is a paper and pencil estimate of redistribution charges (already in the condo fees) of metered unit, user-pay, heating and cooling charges. The issue, and the dispute with the Board, is the method applied (a technical question) of estimating the cost of energy in units in the absence of metered data.
This concerns the replacement of the builder-installed meter with new, deemed more accurate, meters. The dispute had to do with the conditions under which the new meters were installed, the owner's insistence that the 'new meters' be tested and approved by an owners majority vote. The Board decided the metered unit energy charges were required as per Declaration and the owners could have the new meters installed only if they agreed to the position of the Board. The meter was not installed in one unit because of the owner's dissent.
The issue is not about non-compliance with the Heating and Cooling Bylaw as the Board claims, but the over-ruling of the dissenting position of one owner. The reason "Because we can!"
The counsel to the Corporation advised the Board to put a lien on the property for $215.95 which with registration and legal costs came to five-times the purported arrears. The Board, also in advise of legal council, refused to answer the question of motive at the AGM. At the Land Registry Office they told me that there is no lower limit to the amount that could be registered as per individual registration. They would register $1 lien so long as they were paid the $70 fee.
In the eyes of jurisprudence the trivial sums on lien would be seen as motivated by reasons, other than concern about debts to the Corporation. Indeed, my wife (I was out of the country) was refused the ballot to vote for new Board at the very AGM that she was refused an answer to motivation. It does not take too much to connect the dots between the the $215.95 arrears and the disenfranchisement of the dissenting owner.
This is but one example how collection of 'arrears' through liens as laid out in the Condo Act can be abused when there are no conditions attached with respect to motivation and ethical principles. This to me is the 'real mistake' that requires some rewriting of the Condo Act (owners rights) or ethical lawyers, boards and management companies.