Are Ontario condominium common elements themselves specifically & discretely lienable by construction lien claimants ?
Will the answer be forthcoming from the courts ? Whatever the answer, Ontario has amended its construction lien & condo laws in response to lien claimants' demands for more power to secure claims against condo owners & corporations.
What's been there is power to
indirectly damage market value, frighten lenders, undermine commercial credibility. Maybe even to get stakeholders considering termination if severe. Ultimately valid or not, liens on title warn the universe of unpaid works on a march towards sucking equity if timely & successfully litigated or else discharged. They also assert timely priority over other claimants lacking superiority.
The latest judicial step in a London area condo construction dispute, has drawn attention to this. Simpler it isn't yet.
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The disputed London contract termination dispute
in an extreme form may illustrate what the Province of Ontario heard from frustrated claimant suppliers. More details of the latest are in section 3 below,
If your corporation's already in a serious construction dispute, these might benefit from discussion with corporation's qualified counsel. This ain't legal advice.
A Nov 9/17 London Free Press article backgrounds H.I.R.A. Ltd.'s multi-million dollar claims after termination of common area contracts at the +326 unit
Masonville Gardens condo community.
Described as "modest", many of the units are tenant-occupied & owned within sizeable private portfolios. ( Nov 9/17 London Free Press “Owners caught in legal crossfire at north London condo complex”
http://lfpress.com/2017/11/09/owners-caught-in-legal-crossfire-at-north-london-condo-complex/wcm/
d463b740-d477-0478-f5c7-af064036c14b )
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PROVINCE HAS CHANGED CONSTRUCTION LIEN laws The Province of Ontario responded to lots of supplier beefs ( Dec 2017 construction lien legislative changes via assent to much of Bill 142 ). As to condo implications it apparently chose to ignore some objections from ACMO / CCI. ( Those inputs reportedly minimized the frequency & severity of beefs about title-sheltering condo common elements themselves from construction liens. )
The construction claim liening changes appear to try to unshield common elements during a lien dispute. They also MAY make it tougher & pricier for individual owners - eg amidst unit sale - to pro-rata buy their way out as under condo law before 2017-18.
Some reviewers have cited that the Province has abandoned an earlier but arguably crucial requirement in Bill 142 that would have required a distinct land titles office PIN for every set of Ontario condo common elements. Without such how could specific condo common elements be liened ? That leaves units as main targets.
Lien claimers will also still have to lien unit by unit, which computerization has rendered less complex.
It doesn't sound clearly easier nor cheaper for a specific unit to pro-rata escape the construction lien.
SEE BOTH :
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the Construction Lien Act which received Royal Assent Dec 12/17 renamed to “The Construction Act RSO 1990 ch C.30”
https://www.ontario.ca/laws/statute/90c30#BK149AND
the resultant apparent un-shielding of condo common elements ( from construction liens ) & end of former quicky "as of right" pro-rata unit specific bailout. See as now shown i
n the amended Condominium Act 1998’s new section 14 effective July 1 2018 ( “Exception, construction lien - (4) Subsections (1), (2) and (3) do not apply if the encumbrance is a lien under the Construction Act. 2017, c. 24, s. 74 (1).” )
Except for reportedly deleting specific title PINs for condo common elements, the Province's intentions were shown within section 6.1 Condominiums April 30 2016 “
“Striking the Balance: Expert Review of Ontario's Construction Lien Act” https://www.attorneygeneral.jus.gov.on.ca/english/about/pubs/cla_report/Bottom line looks like construction lien claimants want to lay the maximum on condo communities including previously shielded common elements. They apparently do not want to facilitate specific unit bail-outs without a court motion.
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H.I.R.A Ltd v. Middlesex S.C.C. # 823 ( 2018 ) ONSC 3661 issued June 15/18
http://canlii.ca/t/hsl8fPending Divisional Court formal hearings into this dispute to start at least 3 months away ( Oct 3/18 ), lien-filing civil claimant HIRA immediately seeks & obtains until upcoming Divisional Hearing an interim "security posting" relief.
The granted relief is described to suspend a lower Court Order that required M.S.C.C. #823 to post lesser security against HIRA’s $2.744 M lien. The lien SOMEHOW ! ? is described as already "registered" against title to what is here labelled “ the subject project lands” - ? common elements ? Already "registered" . . . but against what ?
Such had been made conditional & suspensive upon posting $ 1.5 M lesser security said just over 50 % of this claim.
HIRA wants a higher security posted. Posting security was a conventional lien scenario.
Doesn't suspending the lower court order ratify a common element lien IF somehow "registered" before such even became legal under both sets of act changes ?