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April 1, 2020 - By Elia Associates

COVID-19 Bulletin No.15: Collections - Thinking Outside The Box - 2 more Months?

Updated April 1, 2020

 How do we balance the needs and interests of the condominium corporation, the unit owner in arrears, and all other 3rd parties (e.g. mortgagees) who have an interest in the collection of common expenses?

There has been, and continues to be a lot of discussion about the application of the Emergency Management and Civil Protection Act (the “EMCPA”) Order and its effect on the 3-month window in which to register a condominium lien.

In our opinion, the most practical solution is to avoid the future legal challenge and conflict by assuming that the 3-month timeframe has not been extended. 

A condominium corporation needs cash flow both today and tomorrow.  There is no value in risking cashflow of the condominium via compromising its legal rights down the road.

It is time for some creative, out of the box thinking!! Also called Critical Thinking in Condominium Law!!

First:  There are many court decisions that tell us that 3rd party interests are important and are not to be ignored in the process.  This interest starts as soon as the first default occurs.  All required notices, beginning with the Notice of Lien are required to be sent to all parties having an interest in the property (see our COVID-19 Bulletin No. 4 and our October 2, 2019 article on Changes to the Collection Process Post Ching v. CCC 203)

Second:  A condominium corporation cannot legally lend money.  The condominium lien, once registered, creates a public record of the debt; however, the lien already existed.  The Act then goes on to say:  (1) the condominium lien can be enforced in the same manner as a mortgage – s.85(6) (not that it is a lending instrument); (2) that any mortgage on title is deemed to be in default – s.88(1)(b) (the mortgage is a lending instrument); and (3) if it was not already clear, that the condominium corporation cannot lend money – s.115(5) (but a bank can lend money).

Following the release of the Ching v. CCC 203 decision last fall, we re-evaluated and changed our collection protocols with a view to focusing more on getting notice to the all 3rd party interests as soon as possible – at the Notice of Lien stage.

The result has been phenomenal!!  Collections prior to requiring registration of the actual Certificate of Lien have gone from slightly under 40% of the files to over 66.67%!  What this means is that, on average, over 66.67% of our files are being collected without actually incurring the cost of registering the lien, registering the discharge, and providing evidence of the discharge to the unit owner.  Effective and Efficient!

Now let’s get really creative – given that banks are in the business of lending money (and a condominium corporation is not, and given that some unit owners simply don’t have the resources at the moment to pay, why not ask the banks for an extra 2 month’s common expenses? – if the unit owner and the banks are agreeable, pay it forward on the already existing mortgage.

I am thrilled to say that this is actually happening – a solution that works for all parties, which does not compromise a condominium corporation’s legal interest or cashflow concerns, and recognises the hardships that some unit owners are now going through.

Other ideas that we have in play include:  (1) as always, in most cases, our legal costs are, and continue to be, deferred to when the debt is collected; and (2) where prompt payment is possible, we will work with a unit owner in lowering the legal fees (only our legal fees) associated with a file.

If you have other ideas on how to make collections work in a balanced and effective way, in thinking outside the box and bringing critical thought to this issue, speak to us.  We want to hear from you.


Richard Elia

1-866-446-0811 ext. 801

Patricia Elia

1-866-446-0811 ext. 802

Antoni Casalinuovo

1-866-446-0811 ext. 808

Ashley Winberg

1-866-446-0811 ext. 806

Megan Molloy

1-866-446-0811 ext. 805

Victor Yee

1-866-446-0811 ext. 810

Jonathan Wright

1-866-446-0811 ext. 603

Taheratul Haque

1-866-446-0811 ext. 804

Julia White

1-866-446-0811 ext. 824

All of the information contained in this article is of a general nature for informational purposes only, and is not intended to represent the definitive opinion of the firm of Elia Associates on any particular matter. Although every effort is made to ensure that the information contained in this newsletter is accurate and up-to-date, the reader should not act upon it without obtaining appropriate professional advice and assistance.

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