“I manage strata titled properties in Greater Vancouver. Some people are so stretched they can’t pay for even the simplest repairs within their unit. One lady yesterday told a plumber to drain the toilet and turn off the water because she couldn’t afford to replace the toilet seal. She did not pay the bill and the plumber is threatening to bill the strata. I think there’s another bathroom in that unit.
Another guy in West Vancouver wasn’t aware he had to pay strata fees at all, so didn’t. There are lots of realtors who are not concerned about telling new Canadians the details. He’s got a huge mortgage and can’t afford $300/momth fees or the special levies. The strata is taking legal action to sell the unit to collect the fees. Strata Corporations can file for Conduct of Sale if the fees aren’t paid, the Court sells the place, the Strata gets first dibs and the “owner” gets what’s left. Wonder how that’s going to work when prices finally come down. A few more lost jobs will take a big toll. “
- Property Manager, greaterfool.ca, 14 Sep 2011 12:13pm
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Jeez, if she was going to stiff the plumber on the bill, she may as well have gotten him to fix the toilet while he was there…
When I was on strata, there were several units that were WAY behind in their strata fees (some multiple years!), including a couple units that hadn’t paid their special assessments for leaky condo repair (condo repairs were completed a year before I moved in). We got the property manager to send notices to those owners that we were going to file to sell their units if they didn’t pay their outstanding bills immediately– that got payments from most of the units, except for one, but they paid up as soon as we filed papers with the courts. Threatening to (legally) sell somebody’s home from under their feet gets quick action!
Oh, an in terms of what happens when real estate starts to drop, stratas will be screwed; fees and assessments that aren’t paid will end up falling on owners of the other units in the complex if underwater owners don’t pay up.
Why? Debts owed to the strata are junior to mortgages, which are junior to property taxes. The only ones lower than the strata is unsecured debts (credit cards and non-secured lines of credit) and the “owners” themselves.
So if your condo’s underwater and you don’t have a job or any way of paying the assessments (and no assets that could be acquired if strata or anybody were to sue you), then you might as well stiff the strata on the fees, and stiff the bank, and stiff everybody else while you’re at it, then declare bankruptcy. This isn’t legal advice, by the way. If you’re in the situation I just described, seek professional help from a lawyer.
Aren’t debts in B.C tied to your name? Even if you stiff the strata for all that and declare bankruptcy, you will still owe a proportion of all that money.
Does anyone clearly know how bankruptcy proceedings happen in B.C?
“Aren’t debts in B.C tied to your name?”
Strata liens, except fines, are tied to the property not the owner. That is when the owner sells the lien does not stay with the owner. Now it’s near impossible to sell a property with a lien in place but it’s in theory possible. The strata will get its money eventually but it can take many years.
Fines, OTOH, are against a person and carry similar force to a by law infraction. So you can start doing all sorts of fun things with people if you don’t mind spending a bit of time and $ setting it up.
The Bankruptcy and Insolvency Act is a Federal statute, and therefore is applied similarly across Canada, there is no special application in BC. If a person files for bankruptcy, their creditors have to file a Proof of Claim with the trustee which lays out the amount the bankrupt owes them.
The bankrupt generally has to pay some money into the bankruptcy, assuming they are not unemployed and destitute, which is divided amongst the creditors. Once the process is complete, usually less than a year, the bankrupt is discharged and all their debts (except for a few exceptions) are gone.
Strata fees arrears + interest are, in fact, ranked higher in priority than mortgages (but not penalties).
Sec 116(5) of the BC Strata Property Acts states:
The strata corporation’s lien ranks in priority to every other lien or registered charge except
(a) to the extent that the strata corporation’s lien is for a strata lot’s share of a judgment against the strata corporation,
(b) if the other lien or charge is in favour of the Crown and is not a mortgage of land, or
(c) if the other lien or charge is made under the Builders Lien Act.
I lived in a building and the next suite over was about a year behind on their strata fees. I think they ended up getting a court-ordered sale or something, the envelope of paperwork was taped to the door for another several months. Finally the building manager went into the suite for whatever reason, check it out to get it ready to sell. Inside the suite was empty except for a mattress and a bag of guns, 40 or so if I remember right. I heard the strata fees ended up getting paid anonymously one day by an envelope pushed under the building’s office door, The suite was later sold by the owner, whoever they were. I guess even drug dealers get behind on their fees these days. hahaha