Condo Boards – No Need to Crack Knee Caps for Past Due Accounts.

An issue that I find myself regularly educating condominium boards about is the process of collecting condominium fees from owners in arrears.  These boards often struggle with the ‘bad guy’ role of collecting delinquent accounts – having to play debt collector with one of your neighbours is just one more thankless job of a condominium corporation and their directors.

 

These collection activities often go ignored – the corporation gets assurances that the money is coming, or the other business of managing the affairs of the condominium corporation get in the way.  However, this role is one that should be managed with diligence and timeliness.  Certain time lines need to be followed to ensure that your condominium corporation can collect the money that it is owed.  The legislation has a powerful tool – the condominium fee lien – that can help in your collection efforts.

 

Affected units should be liened no later than 3 months after arrears start accumulating. Failure to do so could impact your priority on title against any other registered interest holder. This is more important than ever if in a market where housing prices are declining.  If there is limited equity in a property, it is possible that your condominium will come away with nothing if the unit owner is not paying any of their bills.

 

So what?  Well, in one condominium corporation, this meant the difference of $50,000 in condominium fees that were not collected.  That $50,000 now needs to come from the other unit owners in the property, or from other expensive litigation if others are deemed to be at fault.