Event Discussion: Strata Collections

Posted on Wednesday November 27, 2013 |

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 Tony Gioventu (Executive Director, CHOA). The event was hosted in the amenity room of Pacific Point I downtown, a property proudly managed by FirstService Residential.

Numerous Council Members representing 18 different Strata Corporations in the neighbourhood attended the event and enjoyed a lively discussion with guest speakers.

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 debt claims from 6 years to 2 years.
  • Once the debtor acknowledges a particular debt, the limitation period resets from the date of acknowledgement. Acknowledgement is not always clearly identified. 

Staying Proactive

  • It was recommended that Councils stay active in their collection efforts.
  • Generic information from arrears lists can be posted in council meeting minutes to draw attention to owing amounts and encourage owners to pay debts.
  • It is important to keep owners informed of their outstanding debts. FirstService Residential maintains effective procedures for informing owners of owing amounts while keeping accurate arrears lists.
  • Councils should be consistent and fair in how they address debt concerns amongst owners.
  • Ultimately, it is Council’s decision as to how it chooses to proceed against individual owners with outstanding debts owing to the Strata Corporation.

Liens

  • Filing liens early against the titles of strata units that are in debt to a Strata Corporation was recommended by our guest speakers.
  • 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 as they are considered ‘allegations’, rather than established fees approved by all owners.
  • Arrears accrued while a lien is filed can also be included in the lien amount itself.
  • Liens allow the Strata Corporation to ‘jump the queue’ ahead of other creditors looking to collect debts from a particular owner.
  • If the government files a lien against the title of a particular strata unit, this may prevent a Strata Corporation from being allowed to file its own lien against the same title.
  • 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.
 

Pursuing Claims in Court

  • Liens are pursued through the Supreme Court of British Columbia.
  • Pursuing a lien 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 legal costs associated with pursuing a lien 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.
  • Fine amounts are typically pursued in small claims court, where the amount is for $25,000 or less.
 

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 lengthy and expensive court proceedings.
 

Additional Resources

  1. CHOA - www.choa.bc.ca
  2. Clark Wilson LLP - www.cwilson.com

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