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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