Part of managing a condominium community is ensuring that all owners contribute fairly to shared expenses. However, when owners fail to pay their condo fees, the condominium corporation can face financial challenges. In Alberta, registering a lien for unpaid condo fees is crucial to protect the corporation’s financial interests and maintain the property.
What is a Lien?
A lien is a legal claim against a condominium unit giving the lien holder the legal right to the portion of the asset (condo) that would be needed to pay back a debt. Liens are most often levied against condo owners when the owner fails to pay their share of common expenses. A lien allows the condominium corporation to secure the unpaid amount of condominium fees by holding a legal claim against the property, that must be paid directly to the condominium corporation in the event the unit is sold.
Why is Registering Liens Important for Condo Corporations?
Condominium corporations rely on condo fees to maintain shared spaces, cover operational costs, and plan for future repairs. When owners fail to pay, it can disrupt budgets and unfairly burden other residents.
By registering a lien, condo corporations can legally secure the unpaid amount, ensuring fairness among owners and preventing financial strain on the corporation.
Steps to Register a Lien in Alberta
The process for registering a lien in Alberta must comply with the Condominium Property Act to ensure the claim’s validity. Below is an outline of the main steps:
- Notify the Unit Owner
Provide the owner with formal written notice of the unpaid contributions, including any interest or penalties.
- File a Caveat Against the Title
A lien is registered by filing a caveat with the Land Titles Office. The caveat details the unpaid contributions and serves as public notice that a claim exists on the property.
- Recover Expenses
Condominium corporations are entitled to recover all reasonable expenses related to the caveat, including registration, legal, and discharge fees.
- Foreclosure Proceedings (if necessary)
If the debt remains unpaid, the corporation may proceed with foreclosure on the unit. This involves obtaining a court order to sell the property and recover the amount owed.
Other Actions Condo Boards Can Take
Charging Interest
The corporation may impose interest of up to 18% per year on overdue fees.
Suing for the Outstanding Amount
The corporation can pursue legal action to recover unpaid fees, interest, and legal costs.
Engaging the Mortgage Company
If the owner has a mortgage, the condo board may request the lender to pay the outstanding amount, as many banks consider failure to pay condo fees an act of default.
Redirecting Rent from Tenants
If the unit is rented, the corporation can require the tenant to pay rent directly to cover the unpaid contributions.
Larlyn, Your Expert Partner in Managing Condo Liens Complexities
Larlyn is here to help. With extensive experience in condominium administration and legal processes, our team ensures your corporation follows proper procedures to secure its financial interests.
By partnering with Larlyn, you can focus on fostering a thriving community while we handle the intricacies of lien management. Contact us today to learn how we can assist your condominium corporation in Alberta.
