Strata must act if owner doesn’t pay fees

Sunday, September 27th, 2009

Strata has a duty to collect the funds in order to protect other owners

Tony Gioventu

Dear Condo Smarts: Three owners in our strata have not made payments on a special levy that was due at the end of February this year. They each owe roughly $9,000, and our suites currently sell for around $325,000.

Our property-management company has placed a lien against the strata lots, but has advised us not to proceed with a court-ordered sale as we are told the judge would be very unlikely to force a sale.

Part of the problem is our manager is afraid of one of the owners.

If we can’t go to court, how do we get money from these owners?

— N.B., Surrey

Dear N.B.: If a strata lot owner has not paid his strata fees or special levies, the Strata Property Act gives you substantial authority to protect the strata interests, and also to ensure those funds are collected.

Take this chronologically. On Feb. 28, the special levy was due. Those units that missed that deadline should then receive a demand notice advising if they do not pay the amount within 14 days, the strata corporation will be entitled to file a lien against a strata lot.

Once that period has expired, the strata council then needs to decide when a lien will be filed, if the owner is not co-operative in providing payment. The lien provision is there to ensure the strata corporation can collect the money, and it takes a priority over other items such as personal debts and mortgages.

The cost of filing the lien is also included in the lien amount the person owes.

If, at that time, the owner is not co-operative, the next step is to proceed with a court application for a forced sale of an owner’s strata lot.

Depending on a number of conditions, and with the advice of legal counsel at this point, you will decide on what the appropriate time and amount are for proceeding to the application for sale.

According to Stephen Hamilton, a lawyer in Vancouver, “Most strata corporations would consider proceeding to court for the application when the amounts reach $2,000 to $5,000, or a long period of time has passed for the amount owing.

“While most of the costs are recovered, the strata corporation does have some cost associated with court fees that may not always be recovered.”

Don’t wait for the owner to go into bankruptcy or, worse yet, lose their asset because of proceeds of crime, tax evasion or long-unpaid family maintenance requirements.

In such a case, your strata corporation might not be at the front of the queue to get paid what it is owed.

The strata corporation must enforce the bylaws and has a duty to collect the funds.

It is reasonable to take the necessary steps to protect the interest of the other owners who have paid their assessments and are shouldering the costs.

Tony Gioventu is executive director of the Condominium Home Owners’ Association. Send questions to him at [email protected]

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