Quick links
- Cleveland Doan LLP: Strata arrears
- BC Strata Housing: Form F: the Certificate of Payment
- Civil Resolution Tribunal: What is a limitation period?
- Civil Resolution Tribunal: Strata claims
What does council do when money is owed to the strata?
Watch the video Strata Collections: How to get your money with guest speaker Shawn M. Smith, of Cleveland Doan LLP, to learn about collecting money owed to the strata corporation including chargebacks, insurance deductibles, liens, judgments and more.
Is there a time limit to collect money?
Under the Limitation Act, the strata corporation has only 2 years to collect money owed for amounts such as strata fees and special levies. The first day is the day the strata knew or ought to have known that money was owed. For example, the strata corporation would have 2 years to collect a special levy from the date the levy payment is due. Strata councils need to take action well before the limitation period runs out.
The two-year limitation period doesn’t apply to fines owed. See There is No Limitation Period for Collecting Fines But Don’t Wait Too Long.
Can owners be fined for late payment?
Yes, if there is a bylaw which permits the strata corporation to do so. Before issuing a fine, the strata council must follow the bylaw enforcement process set out in SPA s. 135.
Can the strata charge interest?
If the strata has a bylaw permitting it, the strata corporation can charge an owner interest on late payment of strata fees. The rate of interest in the bylaw cannot exceed the rate set out in the regulations, which is 10% per annum compounded annually.
SPA s. 107 says:
(1) A bylaw that establishes a schedule for the payment of strata fees may set out a rate of interest, not to exceed the rate set out in the regulations, to be paid if an owner is late in paying the owner’s strata fees under that schedule.
To charge interest on late payment of a special levy, SPA s. 108 says that the strata must have a bylaw (or wording in the resolution that approved the special levy) that sets a rate of interest to be paid if an owner is late in paying the owner’s strata lot’s share of the special levy. Again, the rate of interest cannot exceed the rate set out in the regulations, which is 10% per annum compounded annually.
The interest payable on late payment of strata fees or a special levy is not a fine. The interest becomes part of the strata fees or special levy owed. This means that interest is included if the strata corporation registers a lien against an owner’s strata lot for any unpaid amount.
What is a lien?
Every strata lot has a “land title” on file at the Land Title Office. This document includes information such as the names of the registered owners and the legal description of the strata lot. It lists “charges”, also known as encumbrances, that are registered against the title such as a mortgage. Here’s a sample land title.
In many cases, a lien is an effective method to get an owner to pay the money they owe to the strata corporation. A lien gives notice to the owners that the strata has made a claim and the amount of the claim. The lien is registered as a charge against the title of a strata lot. Any person or company can order a state of title certificate from the Land Title Office and will see the lien as a registered charge. An owner is usually motivated to pay and have the lien removed especially if they want to sell their unit or need to renew their mortgage.
What amounts can be included in a lien?
The strata corporation can file a lien for certain amounts owing such as strata fees and special levies. It cannot file a lien for user fees, unpaid fines, or the costs of remedying a contravention.
SPA s. 116 (1) The strata corporation may register a lien against an owner’s strata lot by registering in the land title office a Certificate of Lien (Form G) in the prescribed form if the owner fails to pay the strata corporation any of the following with respect to that strata lot:
(a) strata fees
(b) a special levy
(c) a reimbursement of the cost of work referred to in section 85
(d) the strata lot’s share of a judgment against the strata corporation…
See a treasurer’s guide to forms to see what “amounts owing” can be included in a lien vs. a Information Certificate (Form B) vs. a Certificate of Payment (Form F).
How does the strata file a lien?
Before filing a lien, council must follow certain steps. SPA s. 112 (2) says “before the strata corporation registers a lien against an owner’s strata lot under section 116, the strata corporation must give the owner at least 2 weeks’ written notice demanding payment and indicating that a lien may be registered if payment is not made within that 2 week period.” However, 2 weeks is not 14 days. The Interpretation Act sets out how days are counted. Also SPA s. 61 (notice given by the strata corporation) adds days for deemed delivery. Deemed delivery is the day the person is legally considered to have received the notice. Four days are added for all methods of delivery other than handing the document to a person. A best practice is to ensure the deadline stated in the letter gives the owner at least 20 days to pay.
The strata cannot register a lien if the amount owing has been paid into court or to the strata corporation in trust, or arrangements satisfactory to the strata corporation have been made to pay the money owing.
If the owner doesn’t pay by the deadline stated in the written notice demanding payment, the strata can register a lien against an owner’s strata lot. This is done by registering a Certificate of Lien (Form G) in the Land Title Office. The strata corporation’s lien usually ranks in priority to every other lien or registered charge. See SPA s. 116 (5) for exceptions.
Does a lien stop the limitation period?
Filing a lien doesn’t stop the clock. The 2-year limitation period continues to run even if the strata files a lien. The strata has to try to collect the money owed within the 2-year limitation period.
What happens if the owner pays?
On receiving the amount owing, the strata corporation must remove the lien within one week. This is done by registering an Acknowledgment of Payment (Form H) in the Land Title Office.
What happens if the owner doesn’t pay?
If the owner still doesn’t pay, the strata council may want to seek legal advice for help to collect the money before the limitation period runs out.
The strata could make a claim with the Civil Resolution Tribunal (CRT) to request an order for the owner to pay the money owed. There is no monetary limit for CRT strata claims. Before filing a claim, the strata must give the owner at least 2 weeks’ written notice demanding payment and indicating and indicating that action may be taken if payment is not made within that 2 week period (20 days). Learn more about making a CRT strata claim.
SPA s. 117 says that after the strata corporation has registered a Certificate of Lien against a strata lot, the strata corporation may apply to the BC Supreme Court for an order for the sale of the strata lot. If the strata corporation has obtained a judgment for the amount owing, the court may, after considering all the circumstances, make an order for the sale of the strata lot. If the amount owing is not paid within the time period required by the court order, the strata corporation may sell the strata lot at a price and on terms approved by the court.
It’s recommended to hire a lawyer as the BC Supreme Court process is complex. If the court does make an order for the sale of the strata lot, the strata will also need legal help to sell the property and disperse the funds.
When an owner sells their strata lot
A prospective buyer usually orders an Information Certificate (Form B) before purchasing a strata lot. The Form B contains information about the strata corporation and the strata lot, including any amount owing to the strata corporation by the owner of the strata lot.
When a strata lot is sold, a buyer, their realtor or lawyer will request a Certificate of Payment called a Form F. This form must be filed at the Land Title Office to transfer title of the strata lot.
SPA s. 115 says within one week of the request of an owner or purchaser, or a person authorized by an owner or purchaser, the strata corporation must give the person making the request a Certificate of Payment [Form F] in the prescribed form if
(a) the owner does not owe money to the strata corporation, or
(b) the owner does owe money but
(i) the money claimed by the strata corporation has been paid into court, or to the strata corporation in trust, under section 114, or
(ii) arrangements satisfactory to the strata corporation have been made to pay the money owing.
The maximum a strata corporation can charge for a Form F is $15. Some stratas or management companies charge a rush fee if the Form F is requested with less than 7 days notice.
The form must be signed by two council members or the strata property manager. A strata corporation may withhold completing the Form F if the current owner of the strata lot owes money to the strata. The council or manager should not issue a Form F until satisfactory arrangements have been made for the strata corporation to receive the money owing. If money is owing, council may want to consult with a lawyer. If council members sign the form without satisfactory arrangements in place, the strata corporation may not be able to collect any unpaid amounts from either the seller or the buyer!
What amounts are included in a Form F?
For the purposes of a Certificate of Payment (Form F), “money owed” includes fines as well as amounts that can be in a lien. SPA s. 115 says:
(4) In completing the certificate, the strata corporation may include money owing in respect of
(a) the matters set out in section 116 [such as such as strata fees and special levies], and
(b) fines and the costs of remedying a contravention of a bylaw or rule charged against the owner or fines and costs for which the owner is responsible under section 131.
(5) A certificate must not include claims of damages against an owner that have not been determined by a court, by arbitration or by the civil resolution tribunal.
See a treasurer’s guide to forms to see all amounts that can be considered as money owed when completing a Form F.
Member-only resources
Log in to your account to access the following resources. *Indicates a resource for corporate members only.
- Letter templates for collection of money owed to strata corporation*
- Form B – Information certificate (2 formats, one is a fillable pdf)*
- Form F – Certificate of payment*
- Coming soon: Template for financial statement for a strata lot*
- Coming soon: Form G – Certificate of lien*
