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Late payment of common expenses can end up costly

The condominium corporation has put a lien against the unit. What should I do?

Q. I recently sold a condo in Toronto and inadvertently, neglected to pay the monthly common expenses for which I was credited on closing. (I think I did this because it was so close to the beginning of the month). On top of this oversight, the new owners did not pay their common expenses for a couple of months and now we have received a letter through our lawyer that the condominium corporation has put a lien against the unit.

What should I do?

A. What some condominium owners don’t realize is that the common expenses are due and payable at the beginning of each month (the first day) and under section 32 of the Condominum Act of Ontario, the condo corporation has the right to lien after three months of non-payment with additional reasonable costs such as legals and application fees. Normally, items such as utilities do not form a legal lien and must be dealt with through the court system.

However, the government has provided this specific lien right in order to enhance the protection of the numerous condominiums and especially when a good portion of them are purchased as investments and are leased out to tenants. It is still the landlord/owner’s responsibility to look after their common expenses; whether or not they are covered by the rent. More often than not, the building manager will be proactive and contact the owner but the new owners in this case had not contacted the management office with their contact details.

In this situation, the vendor was also subject to a small N.S.F. charge and unfortunately a portion of the legal costs applicable to the registration of the lien (to the tune of $200).

Forgetting your monthly monetary responsibilities can be a costly lesson.

– Jeffrey D. Cowan is the principal of Cowan & Taylor, Barristers & Solicitors, jeff@cowanandtaylor.com. The information contained in this article should not be relied upon as legal advice.