What the Legal Options Are for Collecting Condo Arrears

Michelle Charbonneau, Partner, Finder Novick Kerrigan

The demand letter is the first step. The goal with this is to try to get the owner to react — to call the board, management or lawyer to try and work something out. If that doesn’t elicit a response, then it’s time to step it up.

Two legal two routes to consider:

1. Commence an action, essentially to obtain a money judgment for the amount of the arrears. Note that once you have a judgment, you have to enforce it, which takes time and money. If the owner doesn’t have assets other than the unit, you may not end up recovering much, if anything. It’s a difficult process, and there are legal fees to consider. 
2. File a lien, which is the first step to foreclosing on the unit. This is a way for a board to basically “put the world on notice” that this person owes the board money. The board doesn’t have to move forward with foreclosure, however. The lien goes to the city registrar and is in court records, but the apartment owner is not automatically notified. So if you want to get the owner’s attention, send a letter with a copy of the lien.

Most importantly: A board needs to balance the costs of trying to collect versus foreclosing. It can cost tens of thousands of dollars to go to court, so a board shouldn’t wait too long before acting on an arrears situation.