Condo Lien 101: Here's What You Need To Know About Condo Liens

www.aaronmilleryourlawyer.com *The contents of this article are the sole and exclusive property of Aaron Miller, Barrister & Solicitor. The contents herein are an opinion of the author and does not constitute legal advice. In no way does this article constitute a legal retainer.

Taking Stock of the GTA Condo Market in the Time of Coronavirus


Picture yourself in the following situation: You are a condo board member, and are seemingly aware that a condo owner is failing to pay their common expenses. These common expenses are the "lifeblood" of the condo building's existence. Without common expenses collected from condo owners, there is no way the condo will be able to pay for services such as security, landscaping, maintenance, projects and any other services the condo may need for the benefit of the owners at large. Knowing all of this, you continue to get more and more worried and make your thoughts known to other board members. 

What would the knowledgeable condo board or board member do to rectify a non-paying condo owner? You might have guessed it - get a condo lien.

From my experience, condo boards and condo owners have often heard about condo liens. Unfortunately, there is often confusion as to what condo liens actually are. Condo liens aren't metaphysics, but there are several things a condo board or condo owner will need to know about them. They include:

  • Condo liens actually arise as soon as a condo owner has defaulted on his/her common expenses. However, it is then up to the condo board/corporation to register a Certificate of Lien. A Certificate of Lien, once registered, allows the condo to treat its registered lien like a mortgage. For example, if a property owner defaults on his/her mortgage, the bank can then enforce its rights through means such as foreclosure or Power of Sale of the property. Similarly, when a condo corporation has a registered Certificate of Lien, they too can enforce their rights through the Power of Sale of the condo owner's unit.
  • A condo board/corporation only has 3 months to enforce their lien upon the condo owner's default of common expenses. If not, the lien will expire. Therefore, if the condo owner defaulted on his/her common expenses on January 3, the condo board/corporation must register its Certificate of Lien by April 3.
  •  Before a condo board/corporation can register a Certificate of Lien, written notice must be given to all owners of a condo unit. Notice must also be provided to all encumbrancers, like mortgage-holders (i.e. the bank). I emphasize all owners because case law has shown that where there are multiple owners to a condo unit, they must all be given written notice, or else the condo lien has the potential to be jeopardized. Many times, condos will be owned by joint tenants (i.e. married or domestic partners). In all cases, every condo owner needs to be informed of a condo corporation's lien. Furthermore, the condo board/corporation must inform the condo owners of their lien at least 10 days before a Certificate of Lien is registered. 
Oftentimes, it will be the encumbrancer (i.e. the bank) that will want to pay off a condo owner's arrears for common expenses. An encumbrancer does this because, as the mortgage holder, they don't want the condo corporation to skip ahead of them on the priority list. In other words, if the condo corporation carries out their lien, not only will they be able to sell the owner's unit without the owner's permission - they can proceed without the bank's permission as well.

 Free condo Stock Photos - Stockvault.net

Like I mentioned, condo liens aren't metaphysics, but they can be somewhat complicated. That being said, as I've demonstrated, the whole process can be narrowed down to a step-by-step procedure. However, if a condo corporation wants to register a condo lien, they're going to need a lawyer. As for a condo owner who finds him/herself in a condo lien situation, a lawyer will certainly be advisable.

If you are a condo board who needs a condo lien or are a condo owner in the midst of a condo lien scenario, give me a shout, I'd love to hear from you!

Aaron Miller is a Toronto-based, Ontario licensed lawyer, who is the proud owner of Aaron Miller, Barrister & Solicitor, as well as Legal Counsel to Executive Furniture Rentals in Toronto. Aaron can be reached at aaron@aaronmilleryourlawyer.com, or 416-659-6665.        

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