Recovering Costs When A Condominium Corporation Is In Arrears

After many years of turmoil, a condominium corporation may now be in a position to recover the extensive costs it has incurred to recover past arrears.

The decision from March this year concerned CCC #396 is a 33-unit commercial condominium. Twenty-three of the thirty-three units are owned by related parties, including family members and/or corporations owned and operated exclusively by family members. For several years, the owners of the 23 units failed to pay (either partially or in full) the common expenses or special assessments attributable to these units. As a result, the condominium corporation was required to levy additional special assessments to cover shortfalls in the fees, and clearly faced financial distress.

Liens were registered against the units, and collection proceedings were commenced, culminating in numerous orders and decisions of the Court. In previous decisions, the Court concluded that the liability for fees due from the owner to the Corporation amounted to $490,410. Most recently, the Court released its decision with respect to the extensive costs incurred by the Corporation in these proceedings.

In short, the Court concluded that because these proceedings were commenced for collection of arrears registered pursuant to section 85 of the Condominium Act, 1998, the condominium corporation was entitled to its reasonable legal fees and disbursements in accordance with section 85(3), which amounted to a total of $790,914.63. In its decision, the Court considered proportionality, and whether the fees being claimed were excessive given the amount of recovery. In light of the specific facts of this case, which are detailed in the decision, the Court concluded that the fees were reasonable, and recoverable, pursuant to section 85 of the Act.

Meanwhile, the Defendants have appealed both the trial and cost decisions.