Case confirms court unlikely to extend statutory lien rights


While statutory lien rights usually give a holder extraordinary power over other creditors, they are subject to specific timelines — and as one recent decision shows, when timelines are exceeded, courts are often reluctant to revive those rights, Toronto condo lawyer John De Vellis writes in Lawyers Weekly.

Trez Capital v. Wynford Professional Centre Ltd. 2015 ONSC 2794 involved a condominium corporation with large arrears in common expense payments owed by one owner of many units in the corporation, De Vellis, a partner with Shibley Righton LLP, explains.

“Under the Condominium Act, 1998, common expense payments owed by unit owners are protected via a lien. The condo corporation’s lien, if properly registered in accordance with the act, takes priority over all other encumbrances, even prior mortgages. It is an important consumer protection device as it ensures that a condominium corporation will not lose the ability to finance itself just because its owners have large mortgages that may wipe out the condo corporation’s ability to recover,” says De Vellis.

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