Condos/Stratas › Finance Related
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Interest and Overdue Accounts
Strata and Condominium corporations may charge interest on outstanding receivables. Section 76 of the regulations restricts the interest rate to 18% per annum. In BC, the maximum is 10%.
Any reasonable costs relating to the collection of overdue accounts, and the placement of caveats can be recovered from the owner. These costs can be charged against the owners unit.
A mortgagee may pay the arrears on behalf of the owner and add the amount paid to the balance of the outstanding mortgage. In Alberta, a renter may pay the arrears, and this will be deemed to be payment to owner of rent. S31(2.1-2.3)
Condominium and strata corporations claim against a unit ranks ahead of any mortgage. And therefore it is in the mortgagee’s interest to ensure outstanding condominium fees are paid. A corporation can start proceedings for foreclosure. This action would be at the unit owner’s expense.
What are Caveats and Estoppel (Certificate of Payment) Certificates?
Caveat means "let him beware." It notes on the title that someone else has a claim against the property. Generally, a sale of a unit cannot take place without a clear "estoppel" certificate. An estoppel certificate is simply a document that discloses the balances owing, including outstanding condominium fees, for the condominium unit.
Fines
If the corporation or strata has specified fines in its bylaws, (BC - and rules) fines may be charged to the owner. These fines, cannot hold up the issuance of a Certificate of Payment or Estoppel. In BC the maximum fine is $200 for a bylaw, and $50 for a rule, and may only be repeated every 7 days; the amount should be specified in the bylaws or rules. In Alberta, the amount and frequency is determined by the bylaws, but must be reasonable.