In Ontario, when taking someone to court, most actions must be started within two years of the date the claim was “discovered”. This would normally be the date when an injury, damage or loss occurred or was first discovered.
In condominium-related disputes, an individual or corporation owing money may try to extend a dispute beyond the two-year period to avoid making payment. A condominium corporation may try to avoid paying a vendor in this manner while “working” on processing invoices, or an owner may try to avoid paying fees due to the corporation. In each case, the group owing money may provide assurances of payment to extend a dispute beyond the two-year window. One party has created a problem by failing to pay what they owe and creates a barrier to collecting funds. Such assurances have been viewed by the courts as creating a good faith belief that payment is forthcoming. There is no expectation that a loss or damage will occur thereby making court proceedings unnecessary.
When assurances are made, verbally or in writing, that payment will be made and this does not occur, the two-year period commences at the time it becomes clear payment is not forthcoming. It is at this time that it is reasonably known that a legal proceeding is an appropriate way to seek a solution.