Paying your common expenses

I suggest that you pay your monthly common element expenses by twelve post-dated cheques rather than by automatic withdraws.

Never, never pay any payment to the condo by cash, even for the smallest charge. This includes renting the party room or booking an elevator.

A proper receipt book will have the corporation name and numbered receipts.

However, if you do, make sure you get a signed receipt from a numbered Recept Book stating that the money was paid to the condo corporation, the date and the reason it was paid.

Post-dated cheques
Give or send the property management company twelve post-dated cheques. All cheques must be made out to the condo corporation and never to the property management company.

Use the Memo line to state that this cheque covers the common element fees for a specific month. That way, this money can only be used to pay that month's fees and some, or all of it, cannot be used to pay for some other purpose. (This could be important sometime in the future.)

Automatic withdrawals
I would not allow the condo corporation to make automatic withdrawals from your bank account. It may be very convenient for the property management company but it could cause you a lot of grief later on if:

If the condo corporation changes bank accounts, your withdrawls stop and your monthly expenses could become in arrears.
There could be problems if the corporation changes property management companies.
If the corporation levies a special assessment, you could lose control on how you make your payments. If the management company makes a mistake, your account could become overdrawn.
If the corporation decides to penalize your unit for some expense, they could take the back-charges out of your automatic withdrawals and, without you even knowing it, you would in arrears.

On-line banking
Another very convenient way of paying is use online banking, if one can.  It is possible to describe the reason for the payment (it does have a memo part) and easy to stop future payments.

However, you need to print a copy of the payment for your records before hitting the send key.

Monitor your monthly payments
Faithfully, insure that your payments have been withdrawn from your account. If a month is missed, raise the alarm immediately as it can soon be your expensive problem, not the condo corporation's.

A lazy or incompetent management company—and I would not be writing this if they did not exist—will send your account to the corporation lawyer to start lien proceedings as early as 45 days after the due date.

Money tight?
If money is tight one month, skip paying something else, anything else but be sure to pay your common expenses. Late payments for condo monthly expenses can become punitive.

Some condos will charge anywhere from $25 to $150 for any payments that are ten days late. If you are 60 days late, they may inform the corporation lawyer to put a lien on your unit.

Reminder notices
A friendly reminder notice is not friendly and it had better get your full attention. If they misplaced your cheque, let them know and get it straightened out. Issue a replacement cheque if required.

Here is how one property management company (PMC) deals with late payments.

1st month
During the first month of arrears, two statements are mailed out by the PMC.

2nd month
During the second month of arrears, the PMC will send a lien letter to the owner via registered mail asking for payment in full with the threat of a possible lien if payment is not received.

Also towards the end of the second month, a letter is sent to the mortgagee, if that information is available, telling them that the owner is in arrears and that, if payment was not received, a lien will be registered.

3rd month
During the third month of arrears, approximately two weeks before the end of that period, having concluded that every avenue had been exhausted, the lawyer will be contacted and instructed to register a lien.

Partial payments may not be accepted as the corporation may be afraid that it lose the opportunity to proceed to power of sale. (The corporation cannot refuse to accept payments.)

If the lawyer collected the outstanding monies before placing the lien, he may charge the delinquent owner $300 plus HST.

Changing PMCs
Whenever a condo corporation changes property management companies, there is a good chance that some of the records will get lost or will be incomplete.

At times, the PMC is holding the records for ransom until they get fully paid and sometimes lost records is due to spite.

This is when the owners need to be vigilant. Keep a close eye on your bank statements to insure that your fees have been collected and also that they have not been collected twice.

One condo changed PMCs twice within four months and both companies turned over incomplete records. The condo couldn't tell for sure who paid and who had not.

Absentee owners
Make sure that your current address and phone number is on record with the property management office, especially if there has been a change in the PMC.

If you are an absentee owner, I suggest that you confirm that their records are correct on a yearly basis. If you do not get your notice for the Annual General Meetings, then they may not have your current address.

Horror stories
One condo owner, an older man, send out his post-dated cheques and thought he did all he had to. It wan't his problem that they weren't cashing his cheques.

When the letters from the PMC arrived, he ignored them. He did the same thing when the lawyer sent him a letter.

His co-signer got involved and so he had to pay his arrears, pay to have the lien discharged and pay the condo's legal bills on top of his lawyer's fees.

He almost lost his home.

Then there is a couple who did lose their unit. Their story is told in
"Paid my fees-lost my unit". 

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