The Unacceptable Cost of Strata Arrears in BC Communities
A fundamental responsibility of strata ownership is paying your share of common expenses, yet many British Columbia strata corporations are facing mounting financial pressure from unpaid fees and levies. According to Tony Gioventu, Executive Director of the Condominium Home Owners Association, there is no acceptable level of arrears that councils should tolerate, regardless of economic circumstances.
Real-World Financial Strain
Consider a real scenario from Richmond, where a 120-unit building with an annual budget of $935,000 is currently facing $21,000 in unpaid strata fees and an additional $25,000 in outstanding insurance deductibles. While the corporation maintains manageable cash flow to pay immediate bills, the accumulating debt creates unfair burden on owners who consistently meet their financial obligations.
The situation highlights a common dilemma for strata councils: balancing compassion for owners experiencing financial hardship against the legal duty to collect approved budgets and protect the financial health of the entire community. Many councils receive pushback from property managers when pursuing aggressive collection actions, creating tension between courtesy extensions and fiscal responsibility.
Essential Collection Procedures
Gioventu emphasizes that strata councils have clear authority to establish collection schedules and procedures. When an owner fails to pay strata fees or special levies, the corporation must immediately issue a demand notice requiring payment within 20 days. This critical step enables the strata to file a lien on the delinquent strata lot if necessary, with all associated costs recoverable from the owner in arrears.
Consistent application of collection policies is paramount, according to Gioventu. All owners must be treated with the same level of fairness, including council members who are not entitled to exemptions if they fall behind on payments. The demand notice also triggers important bylaws affecting voting eligibility and council participation rights for those in arrears.
Protecting Corporate Interests
Beyond immediate cash flow concerns, strata corporations must protect outstanding debts to ensure priority over mortgages, bankruptcies, or bank foreclosures. Corporations may also enforce bylaws or special levy resolutions permitting interest charges up to 10% annually, calculated monthly and compounded annually where qualified.
While councils may work with owners experiencing genuine financial difficulties by providing payment extensions, the demand notice remains essential for enabling further collection actions. Gioventu notes that different limitation periods apply to various types of collections, and recovery of insurance deductibles may require a Civil Resolution Tribunal decision or court order if owners don't pay voluntarily.
The fundamental principle remains unchanged: there is no acceptable level of arrears. Every dollar unpaid represents a financial burden shifted to compliant owners and potentially jeopardizes the corporation's ability to fund essential maintenance, repairs, and operational expenses that preserve property values for all residents.
