Articles

What happens when service charges go unpaid

Regular payment of common expenses is what keeps shared living going on residential sites, from security to pool maintenance. When one owner does not pay, the burden falls on the others.

Who pays for what?

Under Article 20 of the Condominium Law, unless otherwise agreed, owners share the costs of the doorman, boiler operator, gardener and security guard equally, and contribute to insurance premiums, maintenance, protection, strengthening and repair of common areas, the manager's fee and running costs of shared facilities in proportion to their land share. An owner cannot avoid this by claiming not to use the common areas.

Late-payment compensation and enforcement

If an owner does not pay, the manager or any other owner can sue or start enforcement proceedings. The law provides for late-payment compensation of five per cent per month for the days of delay.

Under Article 22, anyone who uses a unit on a continuing basis, for example under a lease, is jointly liable for expense and advance payments; a tenant's liability, however, is limited to the rent they owe, and any payment is deducted from the rent.

Statutory mortgage and priority

If the debt still cannot be collected, a statutory mortgage is registered on the debtor's unit in favour of the other owners for the amount established by the court, at the written request of the manager or an owner. These claims have statutory priority.

Mediation

Mediation is a precondition before filing a lawsuit under the Condominium Law. Enforcement proceedings are not subject to this requirement; if the debtor objects, whether mediation is required before the follow-up lawsuit should be assessed separately.

Our view

Most service charge disputes stem from general meeting resolutions not taken in due form, unapproved operating budgets and incomplete records. Checking the minute book, the operating budget and notices before starting enforcement closes the door to later objections.