By Michelle Kelly
A Post for those New to the Condominium Way of Life
If you have never lived in a condominium (“condo”) before or have recently moved into one, you may find that you have some questions about matters such as your condo fees and the authorities that the condo’s board of director has. This is the first in a series of interview-style posts that seek to answer some of those questions so that you can navigate through the condo world (hopefully) without any issues.
We hope that you find these Q and A style posts helpful!
Q: Where do my condo fees go? To whom do I pay them?
A: All payments for condo fees, including monthly fees, special assessments, or other charges, should be payable to the condo. Payments should not be payable to the superintendent, a director, officer, manager or the management company for the condo. The condo’s by-laws may describe the permitted payment options, such as post-dated cheques or electronic funds transfer (EFT) (which is sometimes called pre-authorized payments (PAP)). Most condos do not accept cash payments. The payments are usually delivered to the manager to deposit to the condo’s bank accounts.
Q: What are the condo fees used for?
A: The fees collected from owners are used to pay for the common expenses of the condo, such as maintenance and repairs, utilities (if individual meters are not installed for the units), and professional fees (i.e. for the condo manager, lawyer, engineer, and auditor). The condo’s declaration and by-laws should describe the common expenses in detail.
Q: What happens if I do not pay my condo fees?
A: A condo’s primary source of revenue is from monthly fee payments from its owners. If owners do not pay their share of the costs the condo may not have sufficient funds to pay its bills as they become due.
Q: What are the repercussions of not paying my condo fees?
A: If an owner does not pay their share of the common expense the condo may register a lien against their unit under section 85 of the Condominium Act, 1998. A lien is similar to a mortgage as it permits the condo, like a mortgage lender, to sell the unit if the owner defaults in their obligations. The condo is also entitled to collect interest on the arrears, collection costs (i.e. manager’s fees to send notices of arrears), and legal costs. The lien is not discharged until the condo receives payment in full.
Q: What if I can’t pay right now simply because of COVID?
A: While it is unfortunate that some owners may struggle to pay their condo fees because of the pandemic, it does not change the fact that they are legally required to pay according to the Condominium Act, 1998 and the Declaration. The courts have confirmed that an inability to pay condo fees is not a defence to an action by a condo trying to sell an owner’s unit. A condo may agree to a payment plan with an owner to give them more time to pay their condo fees, but this should not be expected by an owner as it is rarely an option. In short, the owner must find sufficient funds to pay the condo on time or the condo could sell their home.
Special thanks to Zach Powell, summer student at Robson Carpenter LLP, for asking the questions owners want to know and preparing this post.