Release date: January 30, 2020
The Effect of the Mei Ki Ching v. CCC No. 203 Court Case on Condo Notices of Lien
On September 10th 2019, a decision by the Ontario Superior Court of Justice in Mei Ki Ching v. Carleton Condominium Corporation No. 203, 2019 ONSC 4338 ("Ching"), was released. In Ching, the Court ruled that a condominium corporation's Certificate of Lien was invalid because the condominium failed to provide proper notice to the separated wife of the husband, who was the only unit owner on title. The wife had registered a Designation of Matrimonial Home ("DMH") on title to the unit, as part of her family law proceedings against the owner. However, the condominium did not send a Notice of Lien to the separated wife, despite the presence of the registered DMH on title.
Accordingly, many condominium corporations are now instructing their legal counsel to issue the Notices of Lien to the units that are in arrears of common expenses, instead of their Condominium Manager. This is because the condominium corporation, following this Ching decision, should be retrieving and reviewing title to the unit before issuing the Notice of Lien, to ensure that all registered persons who are entitled to receive a Notice of Lien are indeed receiving one. Typically, retrieving and reviewing legal title to a condominium unit is performed by licensed legal counsel, and not the Condominium Manager.
This also has the effect however, of putting more administrative and legal costs on the Notice of Lien stage of the condominium's collection process. Prior to this ruling in Ching, condominiums often did not search title to a unit until the Notice of Lien's payment period was about to expire and the condominium's legal counsel was about to register a Certificate of Lien onto the unit. Now, unit owners who are in arrears will have to pay more at the earlier Notice of Lien stage, in order to clear their arrears and avoid the registration of a Certificate of Lien.
CCI-Toronto's Legislative Committee is encouraging all condominium corporations to speak with their management company or legal counsel to see how Ching might affect their condominium's arrears collection processes.