In a recent case, YCC No. 82 v. Bujold, the Court of Appeal considered the interpretation of Section 85 of the Condominium Act (the “Act”) and, in particular, the timing requirements under the Act relating to notice of the lien and registration of the lien. Section 85 of the Act provides that a certificate of lien must be registered within three months after the default has occurred and that the Corporation must give written notice of the lien to the owner at least ten days before registration of the certificate. Condo corporations that are not diligently complying with these requirements risk losing their lien rights.
In the Bujold case, the corporation served the owner with a notice of lien on June 22, 2007 relating to arrears of common expenses that had accumulated since December 31, 2006. The lien was registered on September 25, 2007. In 2009, the corporation served a notice of sale, and subsequently brought a motion for summary judgment and an order for possession of the unit.
The trial judge dismissed the corporation’s claim on the basis that the lien had expired, as it was not registered within three months as required by the Act.
The Court of Appeal confirmed that a lien automatically arises upon the date of default and expires three months after the default, unless a certificate of lien is registered. As the certificate of lien was registered on September 25, 2007 the liens that arose before June 25, 2007 had expired. However, as common expenses were payable on the first day of each month, a separate default occurred on July 1, August 1 and September 1 and the liens in respect of those defaults were potentially valid.