Part 54 published on 01/05/16
Court orders discharge of strata corporation lien because face amount of lien too high
This case involved a dispute between the strata corporation and one of the owners in relation to a lien registered by the corporation against the owner’s unit. The Court determined that the face amount of the lien included amounts that were not owed by the owner. The Court held that this served to invalidate the lien. The Court said:
…the certificate of lien filed against the Strata Lot did include other improper amounts, specifically the pre-2004 amounts and improper interest charges… The question then becomes whether that renders the 2008 Lien invalid, or only unenforceable with respect to the improper amounts.
The Court noted that, under section 116 of the Strata Property Act, a strata council member or the strata manager is required to certify that the amount claimed in the certificate of lien is in fact owing to the strata corporation. The Court said: “This is inconsistent with the notion that a certificate of lien can be registered for any amount just so long as the owner owes something for strata fees”.
The Court ordered that the lien be discharged at no cost to the owner. The Court also said that the owner was entitled to a declaration that the strata corporation could not charge the owner for any portion of its legal costs incurred in defending the owner’s petition.
With the discharge of the lien, the Court was also asked to consider whether or not the strata corporation was “out of time” to start a Court action for collection of any amounts still owed by the owner to the corporation (but no longer secured by the lien). The Court said that such a claim was subject to a six-year limitation period and the question of whether or not it might be out of time could be determined if and when such a Court action is commenced.