- When an owner defaults on common expenses, the corporation automatically has a lien against the unit.
- The lien expires three months after the default unless the corporation registers a Certificate of Lien.
- An owner can pay everything secured by the lien at any point until the unit is sold, and the corporation must then discharge it.
If you have fallen behind on common expenses, or you are buying a unit and found a lien, the word can sound alarming. A condo lien is a legal claim the corporation has against a unit for money owed. It is a normal collection tool, and it can be cleared.
This article explains how a lien arises, how it is registered, what it covers and how it is removed in Ontario.
How a condo lien arises
When an owner defaults on common expenses, the corporation automatically has a lien against the unit under the Condominium Act, 1998, ss. 85 and 86. The lien covers the unpaid amount, interest, and all reasonable legal costs and collection expenses.
Common expenses include maintenance of the common elements, reserve fund contributions and services such as cleaning and management. A special assessment is a separate cost, but an unpaid one also gives the corporation a lien covering the unpaid amount, interest and reasonable legal costs.
Other debts can also lead to a lien. If an owner cannot pay chargebacks added to their fees and no solution is reached, the corporation automatically has a lien for that debt. A corporation can also get a lien when an owner, after due notice, fails to carry out necessary maintenance and repairs.
How the corporation registers the lien
The lien does not last forever on its own. It expires three months after the default unless the corporation registers a Certificate of Lien in the Land Registry Office. If it expires, the corporation loses its priority over other parties with an interest in the unit.
Before registering, the corporation gives the owner a Notice of Lien. If the arrears are not paid within 10 days, it can register a Certificate of Lien. The certificate covers all amounts owed under the lien, including later common expenses, interest, and the legal fees and costs of preparing it.
| Stage | What happens |
|---|---|
| Default | Lien arises automatically |
| Notice of Lien | Owner has 10 days to pay the arrears |
| Certificate of Lien | Registered at the Land Registry Office, preserving priority |
How a lien is removed
An owner can pay everything secured by the lien at any point until the unit is sold, and the corporation must then discharge the lien. The amount owed includes arrears, interest, and reasonable legal costs and expenses.
Legal costs are the part that often surprises people. Whether such costs can be recovered, and how much, has been contested in the courts, so the amount needed to discharge a lien varies from case to case. Ask for a written statement of the full amount before you pay, and have a lawyer review it if the figure looks high.
If you disagree with the lien
Where you dispute a lien depends on the issue behind it. A lien tied to an issue within the Condominium Authority Tribunal's jurisdiction, such as nuisance (noise, smoke, odour), parking, storage, pets, records and settlement compliance, can be disputed at the Tribunal. Liens tied to issues outside that jurisdiction, such as repairs, must go to the Superior Court of Justice.
If the lien is not dealt with, the process can move toward a sale of the unit, which is covered in a separate article on whether a corporation can sell your unit for unpaid fees.
If you are a buyer who found a lien
- Ask for the status certificate. It may show any arrears on the unit and special assessments levied since the current budget.
- A status certificate must be provided within 10 days, and whatever it includes or leaves out binds the corporation.
- Have your lawyer confirm how any lien will be paid and discharged on closing, since the corporation must discharge the lien once everything it secures is paid.
What to do next
- Gather any Notice of Lien, Certificate of Lien and account statements.
- Check the dates, especially the 10-day and three-month periods.
- Request a written breakdown of arrears, interest and legal costs.
- Contact the corporation early to talk about payment.
- Speak with a lawyer if you dispute the amount or the reason for the lien.
Frequently asked questions
Does the corporation have to go to court to get a lien?
No. When an owner defaults on common expenses, the corporation automatically has a lien against the unit. Registering a Certificate of Lien preserves its priority.
What happens if the corporation never registers the lien?
The lien expires three months after the default unless a Certificate of Lien is registered, and the corporation then loses its priority over other parties with an interest in the unit.
Can I pay the lien off when I sell?
Yes. You can pay everything secured by the lien at any point until the unit is sold, and the corporation must then discharge it. Your lawyer usually arranges this at closing.
Where do I dispute a condo lien?
It depends on the issue. Some matters, such as parking, pets or noise, can go to the Condominium Authority Tribunal, while others, such as repairs, must go to the Superior Court of Justice.
Sources
- Condominium Authority of Ontario – Common Expenses — condoauthorityontario.ca
- Condominium Authority of Ontario – Special Assessments — condoauthorityontario.ca
- Condominium Authority of Ontario – Status Certificates — condoauthorityontario.ca
- Condominium Authority of Ontario – Liens — condoauthorityontario.ca
- Condominium Authority of Ontario – Fees and Finances — condoauthorityontario.ca
- Condominium Authority of Ontario – Chargebacks — condoauthorityontario.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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