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Condominium Priority

CIBC Mortgages Inc. v. York Condominium Corp. No. 385 2016 Ont SCJ

The condominium obtained a costs award against a unit owner for $15,000 in its application against the unit owner to obtain compliance with the unit owner’s duties; the unit owner had been harassing the condominium staff and other residents. Section 134(5) of the Condominium Act allows a condominium to add to the common expenses not only the damages and costs that the court awards (which may only be partial indemnity costs), but also the difference between the actual costs and partial indemnity costs. The order noted that the owner was to pay the condominium by March 17. The condominium did not register a notice of lien until December 12. By the time that the property was sold by agreement of the condominium corporation and the mortgagee, the costs had ballooned to $113,000, far more than the sale price. The judge held that the three-month requirement for registration of a lien (section 85 (2)) applies equally to orders of compliance as it does to normal common expenses. Although the condominium has the right under section 134(5) to postpone payment of the amount due under the order, it must do so before the three-month period has passed. The judge held that the lien was invalid and that the mortgagee had priority to the proceeds of sale.

CIBC Mortgages Inc. v. York Condominium Corp. No. 385 2017 Ont CA

The condominium corporation appealed the decision and the Court of Appeal dismissed the appeal, agreeing with the application judge’s decision in all respects.

Written by Jonathan Speigel Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.