Condo Corporation Not Restricted To Lien To Enforce Payment Of Arrears
In the normal course, if a condo owner fails to pay his or her condo fees, a lien is automatically created against the condo unit. The lien has a priority over every other registered or unregistered encumbrances on title. This includes priority over mortgages (there are some exceptions such as municipal taxes).
The lien expires three months after the failure to pay the condo fees unless the condo corporation registers a certificate on title to preserve its rights to repayment.
The question arises, what happens if the condo fails to register the certificate within the three month period? Does the condo corporation lose its rights and its security in collection of arrears?
The Ontario Court of Appeal has ruled that a condo corporation does not lose its right to exercise other methods of enforcement including suing for judgment. In the same way that any creditor may bring a legal action to collect on monies owed a condo corporation may sue and obtain a judgment.
The Lesson for Condo Corporations: While it is most prudent to register the certificate relating to the lien during the three month period, failure to do so does not exhaust your options. A lawsuit to collect arrears can be commenced.
Carleton Condominium Corporation No. 396 v Burdet, 2012 ONCA 234 https://www.canlii.org/en/on/onca/doc/2012/2012onca234/2012onca234.pdf
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