What Can Be Done To Collect Older Common Expense Arrears? Another Court Decision That Limits Options

A recent Ontario Superior Court decision has confirmed previous case-law that a condominium corporation cannot revive its expired lien rights for unsecured common expense arrears.

TCECC 2041 v TSCC 2051 was a dispute between a common elements condominium corporation (TCECC 2041) and another condominium corporation (TSCC 2051), which is located on one of the parcels of tied land of the common elements condominium. TCECC 2041 was attempting to recover alleged common expense arrears from the owners of all of the units in TSCC 2051. In an attempt to recover the alleged common expenses, TCECC 2041 registered liens against the units in TSCC 2051.

The Court said that a condominium lien could only secure arrears that had fallen due within three months prior to registration of the lien.

The Court also said that, as in the previous case TSCC 1908 v Stefco, a condominium corporation cannot revive expired lien rights (by application under Section 134 of the Condominium Act). And in cases where the lien rights have expired, the corporation’s only option is to seek recovery of the arrears by way of court claim or arbitration (as an unsecured creditor). The Court noted that any such unsecured claim must be started within the two-year limitation period (i.e. within two years of the alleged default).

Given the facts of this case, the Court directed the dispute to mandatory mediation and arbitration.

A detailed summary of this case addressing many of the other issues discussed in the decision, and the link to read the entire case, can be found at Jim Davidson’s Condo Cases Across Canada.