Part 54 published on 01/05/16
Condominium corporation has no right to an equitable lien
Wynford Professional Ltd. (“Wynford”) acquired a large number of units in the condominium. Representatives of Wynford also became directors of the condominium, and controlled the Board.
Wynford was in arrears of condominium fees. However, the Board (under the control of the Wynford representatives) did not register condominium liens to secure the arrears against Wynford’s units. The Board also issued a status certificate, for a new mortgage against Wynford’s units, indicating no arrears. The Wynford representatives were subsequently removed from the Board.
The new Board asserted that, in these special circumstances, the condominium corporation should be entitled to an equitable lien against the Wynford units in priority to the mortgage. The Court disagreed. The Court said:
The (Condominium Act) clearly sets out MTCC’s right to a lien for common expense arrears. As a result, it is not proper for the court to create an equitable lien in its place. The principle is analogous to case law under similar statutes, such as the Construction Lien Act, which have held the court cannot create an equitable lien where a statute has occupied the field by creating a lien for the same purpose.
The court also refused the corporation’s request to “revive” its lien rights.