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Condominium Collections: Small Amounts

From time to time, Corporations are confronted with arrears of a small dollar amount, and the question arises as to the best practice. We have a solution for this.

To begin with, it is important to recognize that Boards have a duty to enforce the bylaws. Enforcement includes taking reasonable steps to collect on arrears. Unfortunately, this means taking steps on even "small amounts." However, it may not be in the best interests of the Corporation to go the full route of enforcement, or indeed, of even retaining counsel to write a demand letter.

In terms of enforcement, there really is only one appropriate course of action. This is due to a curious wrinkle in the drafting of the Condominium Property Act. In Alberta, most matters become "statute-barred" after two years. This includes collecting on condo fees - formal collection proceedings should be started before the two years are up. However, the Courts have held that a Corporation is entitled to leave its caveat for unpaid contributions in place until the amounts owing are paid in full.

This means that for most matters, when the property comes up for sale and a clear estoppel is requested, the Corporation can finally get repayment of these small amounts. Additionally, the legal fees incurred for caveat filing are supported by the Courts and paid without a fight.

We are pleased to work with you and your manager to effect a reduced fee for this filing. We will charge $375.00 to register the caveat. Further, we have agreed to extend the time for collection of this account, in the hopes that the owner will pay. We will not seek payment for at least three months.

If the owner pays within that time period, we will also collect the legal fee from the owner, not the Corporation. In any event, we will also collect upon payment any amounts required to effect the discharge - there will be a processing fee and land titles fees payable by the owner upon discharge.

Please give us a call if you would like to discuss this further.