Does your Strata have an owner not paying their strata fees? Strata Corporations can now collect full legal fees when collecting on a strata lien. A strata corporation should not have a buildup of arrears from owner(s) as it can be a great burden on many strata corporations when one or more owners are not paying their strata fees and/or special levies.
There are steps a strata corporation can take to collect arrears. Strata councils have a duty to act in the best interest of the strata corporation (section 31 of the Strata Property Act) and it is in the best interest of the strata corporation to collect unpaid strata arrears so the other strata owners are not having the make up the shortfall for those who do not pay their share of expenses.
Reasonable Legal Fees
In the decision of The Owners, Strata Plan KAS 2428 v. Baettig, 2017 BCCA 377, the British Columbia Court of Appeal decided that “reasonable legal fees” are the actual legal fees associated with registering a lien against a delinquent owner’s strata lot and/or enforcing a lien and may be added to the amount owing to the strata corporation under a Certificate of Lien.
Section 116 and 117 of the Strata Property Act, allows a strata corporation to register a lien against an owner’s strata lot for unpaid strata fees and/or special levies and to enforce the lien by applying to the Courts for an order for the sale of the strata lot. Section 118 allows the strata corporation to recover certain costs that are incurred in registering and enforcing a lien pursuant to section 116 and 117, including its “reasonable legal costs”. As a result of the Baettig decision, the strata corporation should be able to recover the legal fees that are incurred, so long as they are reasonable.
We recommend hiring a strata property lawyer when a strata lot owner first goes into arrears. To start, the strata property lawyer will draft a demand letter and send it to the delinquent strata lot owner, in accordance with section 112 of the Strata Property Act and the applicable case law which sets out other important rules and procedures when collecting arrears. Section 112 and the rest of the collection process have strict procedural requirements, therefore, it is best to hire a strata property lawyer to help the strata council with collecting.
This article is for general information only and is not to be relied upon as legal advice. If you have questions or require legal advice please contact Maris Holmes.