Part 56 published on 01/11/16
Condominium corporation entitled to take collection steps (and claim costs) despite the small arrears
The owner failed to pay condominium fees in a timely way, and failed to pay resulting interest and incidental costs “based on a stubbornly held but flawed interpretation of provisions of the Condominium Property Act…and provisions of the by-laws of the (condominium corporation). As a result, the liability of the appellant, Robin James Goertz, originally measured in the range of a few hundred dollars, ballooned to some $80,000 as a result of being ordered to pay solicitor-client costs of the condo corp and the taxable costs of the respondent, Condominium First Management Services Ltd. (the condo manager). Mr. Goertz ultimately seeks to recover the $80,000, paid by him to avoid loss of ownership in each of his four-condo units through foreclosure.”
At the lower Court, the condominium corporation and manager were awarded summary judgement for the arrears, interest and costs, subject to certain reductions determined by the lower Court judge. The lower Court also ordered foreclosure of the owner’s four units.
The owner appealed and the appeal was dismissed. One of the key questions addressed by the Court of Appeal was as follows: Were all of the collection efforts and costs excessive, given the relatively small original amount of the arrears? The Court of Appeal said:
Mr. Goertz appears to have expected that the condo corp and condo manager would take no action when he failed to respond to the demand letters for the payments of his arrears in condo fees and, in particular, not to apply for orders of foreclosure on his four units as a result of his default in payment of arrears. The condo corp was not obliged to ignore his defaults or await the sale or remortgaging of his units as a means to secure repayment.
While it seems almost surreal that an owner would allow foreclosure to issue against each of four condominium units rather than paying small sums owing, that does not support the conclusion that the chambers judge erred in any way in making the order under appeal. As she stated in her decision:
At some point, enough is enough. The reason the Condominium Corporation is given these extreme enforcement tools is to ensure that all members are motivated to pay their allocated portion of contributions in a timely manner so that other unit holders are not left having to cover these expenses. … The Condominium Corporation can use its available tools to enforce compliance, provided it is operating within the limits as described by the [Condominium Property] Act and its own bylaws…
