Tony Gioventu
Province
Dear Condo Smarts: I work as the resident manager for a large strata corporation in the Tri-Cities area. We have an ongoing situation with owners who do not pay strata fees, fines, special levies and insurance deductible claims. Right now, we have four owners who each owe more than $13,000 in unpaid fees, most of it strata fees and levies. Our strata council has decided that rather than using legal services, to assign the collection of the fees to a collection agency. If we use a collection agency, how do we cover the cost of the service? It seems to me that we have a better chance of collections through the courts. What is your view?
-Sincerely, JM.
Dear JM: The strata corporation has better authority and financial gain by using the provisions set out in the Strata Property Act.
For starters, special levies, strata fees and the permitted interest on those fees, are amounts that may be liened against the strata lot, thereby securing the debt as a priority over most charges on the title. The strata corporation interest will even come ahead of a mortgage or loan debt filed on the title. If the strata lot has not paid those amounts and either the amount owing or the period of time requires further action, the strata council has the authority to retain legal counsel, without the need of a 3/4 vote, to then proceed with a court action for an eventual order for sale.
The strata will recover the fees and interest owing and a reasonable portion of the legal and court costs. At the same time, the owners have a reasonable period of time to attempt to resolve their financial position without the constant harassment of a collector.
Using a collection agency requires the strata corporation to assign the debt owing to that collection agency. The strata corporation cannot assign the debt to another party unless it does so by 3/4 vote resolution. Also, once the debt is assigned, the strata corporation might not be able to charge back the cost of the collection agency’s service to the defaulting owner.
The best solution the strata corporation can employ are the provisions set out in the act and regulations. No one wants to see an owner lose his or her home, but that’s the decision a buyer makes when that individual moves into a strata, and owners must pay their fees and levies. Strata corporations who run their operations like a business and vigilantly collect fees rarely have problems with owners paying. The expectations are clear, and so are the penalties.
Tony Gioventu is executive-director of the Condominium Home Owners’ Association. Send questions to him at [email protected]
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