CONDOBYTE - Traffic Tickets and Liens

Have you ever received a traffic ticket and examined it so closely, hoping to find a mistake, so that you could get it thrown out? Liens are much the same. Unit owners and their lawyers are always looking for a way to get your lien thrown out. They will find the most minuscule error and use it as their defence. That is why it is so important to perfect the corporation’s administrative functions and record keeping.

A defective lien, when challenged, can cost the corporation in more than one way. If a lien is found to be defective:

1. the corporation can no longer seek reimbursement of the lien legal costs from the unit owner. The corporation will have to foot the bill;
   
2. depending on when the invalid lien is discovered, the corporation will not be able to recover all of the unpaid common expenses under the registration of a new lien, because the 3 month limitation period for several of the unpaid months will have expired. This could cost the corporation thousands of dollars.

In an effort to avoid and eliminate defective liens, we suggest the following precautions be taken by the corporation’s managing team.

Pre-lien/Lien Instructions

When the corporation issues its own pre-liens/Form 14's, you must be sure that:

1. No more than three months of arrears are noted, and that the common expenses noted are no more than three months in arrears;
2. No less than 10 days notice is provided to the unit owner;
3. The expiry date is on a business day;
4. The pre-lien deadline does not expire on the last day of the month;
5. Notice is provided to the unit owner at any alternate address for service in the corporation’s records;
6. The corporation’s by-laws and declaration are examined to ensure that extra notice is not required, above and beyond the 10 days notice required by the Condominium Act, 1998. If so, additional days must be provided, in order to comply with the corporation’s documents.

When Fine & Deo is instructed to issue the pre-lien/Form 14:

When forwarding pre-lien and/or lien instructions to our office, please ensure that we receive your instructions by the 10th day of the month. This will ensure that sufficient time is provided to comply with deadlines. Please also ensure you are completing the instruction forms in their entirety as the information contained on these forms will assist our office in ensuring the accurate issuance of pre-liens and liens.

Alternate Addresses for Service

The corporation is legally required to provide unit owners, who have provided the corporation with an alternate address for service, all notices, to that alternate address for service. Any notification of an alternate address for service must be added to the corporation’s records and duly noted on any pre-lien and lien instructions forwarded to our office. Any secondary addresses are addresses of which you are aware from information in your file. Please ensure that you search your file for any such addresses, for example, any addresses found on the unit owner’s cheque, or correspondence to you.

It is also very important, when transferring records from a previous management company, to obtain and properly record any alternate address for service for unit owners which were previously provided by the unit owner to any previous property manager.

Payments to the corporation:

Any and all payments submitted by unit owners to the management office, including site offices, must be deposited and posted to the unit owner’s accounts in a timely manner. This will assist in minimizing inaccurate pre-lien/lien instructions being forwarded to our office. We suggest that notification of any payments submitted to site offices are immediately faxed to head office in order to keep information current with all administrative parties. If our office has initiated pre-lien/lien proceedings, our office must also be advised of any and all payments submitted to the corporation. Copies of payments must be faxed to our office immediately.

When a payment is submitted to the management office, you must take note of whether or not the payment specifies which month it is to be applied to and if so, the corporation MUST apply that payment to the month specified. You cannot apply payments to previous arrears, unless the payment does not specify what month it is to be applied to.

When our office receives payment on a lien, whether from a unit owner or their mortgagee, we must also be sure to apply their payment as they have instructed. Accordingly, when our office forwards payment of a collected lien to your office, you must ensure that the payment(s) are applied to the owners accounts as detailed in our correspondence to the corporation.

Pre-Authorized Payments (PAP)

Pre-authorized payments, when withdrawn from the unit owner’s account, must be applied to the month it was withdrawn for. If a pre-authorized payment is returned due to insufficient funds in the unit owner’s account, the corporation may be able to apply the next months’ common expenses back to the NSF month, ONLY if the PAP agreement does not specify otherwise. If the corporation is unsure of the wording and would like for our office to review the PAP agreement, we would be pleased to do so.

It is also very important NOT to cancel any PAP withdrawals once a unit has been liened. The only time a PAP plan is to be cancelled is upon the request of the unit owner.

Communicating with Unit Owners once lien proceedings are commenced Once pre-lien/lien proceedings have been commenced, we suggest that you do not communicate with unit owners, or anyone representing the unit owner, whether it be in writing, or verbally. Simply direct them to our office and we will handle all enquiries. We find it best to maintain one line of communication with the unit owner once lien proceedings have been commenced. This avoids hearsay and miscommunicated information. By maintaining the above practices when administering and managing information for the corporation, you can ensure that your lien will be perfect and chances are, it will not get thrown out.