It may be frustrating and problematic to some owners. Take, for example, the owner that has had a lien registered against her unit. She believes that the lien is without merit and expresses this to the property manager. The problem is that the property manager has turned this file over to legal counsel for the purposes of registering and administering the lien and arrears. It’s now out of the property manager’s hands until the arrears are paid.
Unfortunately by this point, the owner has already incurred additional legal costs which must too be paid before the lien can be discharged. Note that section 85 of the Condominium Act allows all reasonable legal costs in connection with the collection of the unpaid amount to be added to the arrears. The hole digging has started.
Property management will cease withdrawing preauthorized payments for common expenses. The hole deepens if the owner does not make the common expense payments to the legal department now administering the arrears.
Unexpectedly, the mortgage lender (“mortgagee”) shows up wielding a second shovel, in the form of a letter advising that they will be paying down your arrears and adding the cost to your mortgage. The mortgagee has an interest in ensuring that this is no condominium lien on title as such lien would rank in priority to the mortgagee’s interest in the property. If arrears continue to accrue, the mortgagee’s interest would be eroded.
The caution to owners is this: act quickly to dispute arrears and communicate this to the board of directors. Take active steps: ask for a meeting with the board; ask for evidence of the arrears amounts; produce your own evidence of payments. Don’t wait for a lien to get registered. If the lien gets registered, do not cease making payments for common expenses, notwithstanding that the lien is in dispute, and notwithstanding that property management is no longer withdrawing payments automatically.
You may wish to retain a lawyer to communicate and negotiate with the condominium corporation’s counsel.