Condo Fee Arrears

Arguably the biggest responsibility of any Condominium Corporation is to ensure that the bank account has enough money in it to pay for the expenses it must incur. The primary source of income for any Condominium Corporation is Common Element Fees. And let’s be honest here, collection of these Condo Fees is 98% of the time hassle-free. It is regrettable that 2%, and I feel as though it is probably closer to .2%, can make the Accounts Receivable process for Self-Managed and Registered Condominium Managed Condos an absolute nightmare.

What those working on behalf of the Condominium Corporation and the Unit Owner’s themselves should know is that Common Element Fees in Ontario hold the same amount of weight as Mortgage Payments. Let me restate that: Condo Fees = Mortgage Payments. This isn’t just an analogy; this is fact directly taken from the Condominium Act (1998.)

Section (85) subsection (6) Lien enforcement

The lien may be enforced in the same manner as a mortgage. 1998, c. 19, s. 85 (6).

Section 84 of the Act also clearly outlines is that the Condominium Corporation is entitled to fees irrespective of the Unit Owner making claims against the corporation:

Section (84) subsection (3): No avoidance

An owner is not exempt from the obligation to contribute to the common expenses even if, …(b) the owner is making a claim against the corporation;

So, don’t be bullied by egregious claims made by unruly Unit Owners. The law is on your side, but you must use the teeth of the law and bite, otherwise, you are simply just snarling those teeth, and could get called out on it, with you tucking your tail between your legs.

What do you do then? First things first, you must have immaculate financial records. Secondly, you must correspond in accordance with the Act. Don’t set a precedence of allowing for fees to come in late, nip that in the bud, early and often. There is a time to be compassionate and a time to be stern, recognize each but don’t allow the Condominium Corporation to be taken advantage of either way.

Collection Notices sent out on the first of the month with a reasonable time frame to pay and a collection fee if this is not met is a great first step. From this point forward the gloves must come off. But you have several different options. There is a limit on how far you can go back to lien a Common Element Fee, and it is 3 months. But you are, in accordance with the Act, entitled to give Notice of Lien on the date of default, which is technically 1st of the month.

Again, 98% of the time, this will be rectified with your collection notice or arrear notice, but for the 2% that force your hand into placing a lien against a Unit Owner, ensure you have someone issuing the certificate that knows what they are doing like a lawyer. Yes, there will be a fee, but the Condominium Corporation will not be on the hook for all of this, the Unit Owner will be.

Condominium Banking – Small Condos

There is no question that every Condominium Corporation, self-managed or by a Registered Condominium Manager must have two bank accounts: Operating and Reserve.    But with whom they bank with and who has signing authority is what separates one condominium corporation from the next. 

              There are specific questions that need to be asked when making this decision.  I would like to first take