Home owners are expected to pay the cost of maintaining their home. With condo living this comes in the form of an obligation to share in common expenses of the corporation. When they fail in this obligation, regardless of the reason, condo directors have an obligation to ensure these fees are collected so common expenses can be paid.
Condominium corporations have been granted authority to establish and collect condo fees per the Condo Act. When there are arrears the corporation secures its’ right to the debt by registering a Certificate of Lien on title to the unit. While this is a powerful tool to ensure collection of condo fees, avoiding arrears is preferable in that it eliminates the cost of collecting unpaid fees and any risk of not having funds to meet operational needs.
An effective collection process will identify when fees have not been collected and the procedure to be followed.
Collection problems can arise when the condominium manager or management company neglect their collection obligations, or when a condo board interferes in collection practices. Best practice includes condo boards being updated on collection activity at board meetings. They should avoid micromanaging the process by making decisions about collection practices for specific units or owners.
Personal challenges that affect an owner’s ability or willingness to pay their condo fees can include loss of employment. Owners may seek to avoid having a lien placed on their unit by requesting compassion. While empathetic to a specific situation, neither condominium manager or condo board should be prepared to deviate from their standard practices. Doing so places unreasonable risk on others who pay their fees on time. Should funds be irretrievable, the condominium manager and/or condo board may become personally responsible for these amounts.
Collection procedures for condo fees should be an automatic process unaffected by personal circumstances. For more information on collection practices and condo fees see Condo Fee Collection Best Practices and Condo Liens and Chargebacks in the Condo Archives.