1. It's faster, easier, and cheaper to collect strata fees in Small
Claims Court.
Arrears of strata fees can be collected by filing a
Form G - Certificate of Lien and obtaining an Order for Sale in the Supreme Court.
The process is relatively quick and easy. A trial is not required and you can
select the date to go to Court. Once you obtain an Order for Sale, often the owner
or their mortgagees will pay the amount owing. If they don't the Strata Corporation
simply sells the strata lot, and pays itself from sale proceeds in priority over
the mortgagees. An Action in Small Claims Court is an Action in debt. Small Claims
Court does not have the jurisdiction to make an Order for Sale. As a result, the
Strata Corporation has to go through the process of a Settlement Conference and a
Trial in order to obtain a Judgement. After they obtain a Judgement, the strata
corporation must then take steps to enforce the Judgment, which can be registered
against the strata lot, but that Judgment ranks in priority after the mortgagees.
Also, separate court proceedings are required to obtain an order for the sale of
the strata lot to collect the Judgment.
3. You cannot charge interest on overdue strata fees.
Section 107 of the Strata Property Act allows a strata
corporation to charge interest on unpaid strata fees provided there is a valid bylaw
and that the maximum interest in the bylaw is no more than the maximum in the Regulations,
which is currently 10% per annum, compounded annually. The interest on strata fees is
considered part of the strata fees, and therefore, can be included in the amount owing
under a Form G - Certificate of Lien.
5. A Strata Corporation can recover all of its legal costs in a forced sale proceeding.
Section 118 of the Strata Property Act allows a strata corporation
to collect the reasonable costs of enforcing their Form G - Certificate of Lien. Reasonable costs
has been interpreted by the Court to mean costs, as they are defined in the Rules of Court . ("Costs").
Costs are calculated on the basis of a Tariff set out in the Rules of Court . They are linked in any way
to the actual amount of legal fees incurred by the strata corporation. However, Costs usually work out
to be between 30% to 50% of a strata corporation's actual legal costs.
For more information, please see our Strata Collections services, or contact Veronica Franco at 604.891.7714 or vpf@cwilson.com.
