Can a Condo Corporation Sell Your Unit for Unpaid Fees in Ontario

Falling behind on condo fees can feel like it puts your home at risk. In Ontario it can, but only after a series of steps that give you time and chances to act.

This article walks through how a lien can escalate to a sale of your unit, which notices you should receive, and the rights you keep along the way.

It starts with a lien

When an owner defaults on common expenses, the corporation automatically has a lien against the unit. It covers the unpaid amount, interest, and all reasonable legal costs and collection expenses.

To keep its priority, the corporation must register a Certificate of Lien in the Land Registry Office, or the lien expires three months after the default. First it gives the owner a Notice of Lien. If the arrears are not paid within 10 days, it can register the certificate.

Unpaid amounts can involve more than the regular monthly fee. Common expense fees pay for maintaining the common elements, reserve fund contributions, and services such as cleaning, building maintenance and condo management. A board can also levy a special assessment through common expense fees without owner approval, for reasons such as unforeseen expenses, a major repair that exceeds its budget, and litigation costs. Your share uses the same percentage as your common expense share, and an unpaid special assessment also gives the corporation a lien covering the unpaid amount, interest, and reasonable legal costs and expenses.

The steps from lien to sale

A sale is not automatic. The corporation must wait out the redemption period and then go to court, so the process involves several chances for you to respond.

What happens to the sale money

After judgment, the corporation can sell the unit and recover the lien amounts from the proceeds. It must pay the remaining balance to the former owner within 90 days of the sale. Any mortgage or other interests are a separate matter, and their effect depends on your situation, so a lawyer should review them.

Your rights and ways to stop the process

• Pay and clear the lien. You can pay everything secured by the lien at any point until the unit is sold, and the corporation must then discharge it.
• Know what you owe. The amount includes arrears, interest, and reasonable legal costs and expenses. How much legal cost can be recovered has been contested in the courts, so ask for a written breakdown.
• Use the redemption period. The corporation cannot take further enforcement steps during the 45 days after the Notice of Sale Under Lien.
• Dispute the lien where appropriate. Matters within the Condominium Authority Tribunal's jurisdiction, such as nuisance, parking, storage, pets, records and settlement compliance, can be disputed there, while issues outside it, such as repairs, must go to the Superior Court of Justice.
• Respond in court. The corporation must sue for possession in the Superior Court of Justice before it can sell.

Not every lien comes from unpaid monthly fees. Liens can also arise from unpaid chargebacks or from failing to carry out necessary repairs after due notice. The route to a sale depends on the facts, so check the details of your own file.

What to do next

• Do not ignore any Notice of Lien, Certificate of Lien or Notice of Sale Under Lien.
• Write down the dates on each document and count the 10-day, 15-day and 45-day periods.
• Ask the corporation for a full written statement of the amount needed to clear the lien.
• Contact the corporation early about a payment arrangement.
• Speak with a lawyer promptly if you receive a Notice of Sale Under Lien or court papers.

If you are buying or selling a unit with arrears, the status certificate matters. It must be provided within 10 days and may include any arrears on the unit and any special assessments levied since the current budget, and whatever it includes or leaves out binds the corporation. What applies to a particular unit depends on its facts, so it is worth confirming with a lawyer.

Frequently asked questions