Part 44 published on 01/11/13
Condominium corporation could apply common expense payments (received by pre-authorized debits) to the oldest arrears
On September 30, 2011, the condominium corporation registered a lien against the owner’s unit, covering:
• Unpaid monthly common expenses;
• A chargeback of $1,254.75, from 2008, for damages allegedly caused by the owner to the parking garage door;
• A chargeback of $220.36 from July of 2011 for a plumbing invoice allegedly due to the owner’s failure to maintain her unit;
• Interest;
• Legal costs.
The owner argued that her pre-authorized payments could not be applied to the chargebacks and the corporation’s three month right to lien for the 2008 chargeback had therefore expired.
The condominium corporation argued that the pre-authorized payments could be applied to the chargebacks and the lien was timely because it covered resulting unpaid arrears for the months of July through September, 2011. The condominium corporation asserted that “payments are applied to the oldest debt so that the three month time to register a lien keeps moving ahead. Therefore each time a payment was received, the default date is moved ahead a further thirty days. This applies to the chargeback for both the garage damage and the plumbing invoice.”
The Court agreed with the condominium corporation – at least in relation to the 2008 chargeback. The Court said:
• The chargebacks for the garage door and plumbing problem could be added to the common expenses by virtue of a provision in the corporation’s by-laws and Section 92 of the Condominium Act, 1998.
• “As payments came in from the (owner) each month for her common expenses, the default rolled forward every thirty days.”
However, the Court held that the condominium corporation was not entitled to recover the chargeback in relation to the plumbing repair because (a) the evidence on this issue was contradictory and therefore would require a trial; and (b) it was “not an amount that is significant enough to warrant the expenditure of public resources for a trial”.
Finally, the Court said that the condominium corporation had improperly refused to accept common expense payments tendered by the owner. “As such, (the condominium corporation) did not have the right to charge interest on those payments.”