COVID-19

March 19, 2020 Published by Other - By Shibley Righton LLP

COVID-19: Open letter to the Government of Ontario regarding Liens

An open letter to the Government of Ontario by Shibley Righton LLP's Condominium Group. Requesting clarification about lien periods during the state of emergency.

Open letter to the Government of Ontario

COVID-19 is affecting everyone. Our economy is in a downturn with people losing their jobs. Our new norm of social distancing and uncertain work, has led all governments to enact drastic measures, including an $82 billion COVID emergency response from the federal government, the extension of the deadline for filing personal taxes to June 1, 2020 and the payment of taxes to August 31, 2020.

Every step taken by our governments to help alleviate the economic impact of COVID-19 is necessary and we thank them for taking the steps they have to date.

More than half of the residents in the City of Toronto, and more than 1.6 million Ontarians across Ontario, live in condominiums. The lifeblood of condominium corporations, which are not-for-profit corporations, is the full and timely payment of the monthly common expenses. Without this, corporations would not be able to pay their bills and keep their doors open. This obligation to pay common expenses cannot be suspended.

In order to assist corporations in collecting arrears, the Condominium Act, 1998 provides that the corporation has three months from the date of default to register a lien against title to the unit(s) in order to preserve its secured position for collection, and the Board has a statutory duty to collect all arears and preserve this lien right. Once a lien is registered, if amounts remain unpaid, eventually the unit can be sold by the corporation. The fees associated with issuing a Notice of Lien and the registration of a lien, can exceed $1,400.

In these exceptional times, with the resulting financial hardship on everyone, condominium boards, management and residents should focus on the health, safety and well being of their communities. We encourage the Government of Ontario to immediately take the temporary measure of extending the statutory lien period to 6 months from default, to be revisited as necessary. By extending the time period, during these exceptional times, owners will have more time to pay before these additional collection costs are incurred and charged to them, and this will reduce the anxiety of collection steps being taken against their home or property.

Respectfully,

The Shibley Righton LLP Condominium Group