Event Discussion: Strata Collection Procedures

Posted on Thursday February 13, 2014 |

FirstService Residential hosted an educational seminar for council members on the topic of “Strata Collections and Changes to the Limitation Act”. The event featured a panel discussion with guest speakers Veronica Franco (Partner, Clark Wilson LLP) and Fiona Therrien (Regional Director, FirstService Residential). The event was hosted at the Pinnacle Hotel in North Vancouver, with council members representing eighteen different strata corporations in attendance. The following is a general summary of discussion points from the event:

General

  • The amended Limitation Act came into effect on June 1, 2013 and has decreased the limitation period for most debt claims from 6 years to 2 years.
  • All debts owing prior to June 1, 2013 will fall under the limitation period outlined in the previous Limitation Act.
  • Once the debtor acknowledges a particular debt, the limitation period resets from the date of acknowledgement. Acknowledgement is not always clearly identified and typically is required to be in writing.
 

Staying Proactive

  • Your management company should maintain a clear and consistent collection and lien process to inform owners of outstanding fees before filing liens.
  • Strata councils should be reviewing their statement of aging accounts prepared by their management company on a monthly basis to ensure they are aware of outstanding receivables.
  • Strata councils should consult with their property manager on how to address individual collection situations while maintaining a consistent and firm stance on collections.
 

Liens

  • Filing liens early (typically two to three months after a missed payment) against the titles of strata units that are in debt to a strata corporation is an effective way to assist in collecting outstanding fees.
  • Typically, only strata fees, interest, and special levies can be included in a lien amount. Items such as insurance deductibles and fines cannot be included in lien amounts.
  • Arrears accrued while a lien is filed can also be updated and included in the lien amount itself.
  • A lien is not an action. It is simply a claim on an owing debt. As such, filing a lien does not pause the limitation period.
  • Reasonable fees incurred throughout the lien process can also be included in the lien itself. For example, the fee for filing a lien may be included in the lien amount.
 

Pursuing Claims in Court

  • Pursuing a debt through the Supreme Court of British Columbia can be a relatively quick process. Initial court appearances can be scheduled in some cases as early as six weeks from when proper paperwork is filed and presented to the court.
  • It is possible to collect a portion of legal costs associated with pursuing a debt in court. Awarded legal costs are not related to actual legal fees. Legal costs are awarded based on a tariff point system. The system assigns a dollar amount based on a total number of points accumulated from particular events and actions throughout litigation.
 

Looking Forward

  • The B.C. Government is exploring the development of a Civil Resolution Tribunal as an economical and efficient way for strata corporations and owners to address debts and grievances while avoiding traditional court proceedings.
 

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