A condo lien is a legal claim that a condominium corporation can place against an owner's unit when common expenses go unpaid. Under Section 85 of Ontario's Condominium Act, 1998, this lien arises automatically as soon as an owner defaults, and it gives the corporation powerful tools to collect the debt, including the ability to force the sale of the unit.
Common expenses are the fees every condo owner pays to fund building operations, maintenance, insurance, and the reserve fund. When an owner falls behind on these payments, the financial burden shifts to every other owner in the building. The condo lien exists specifically to prevent that outcome.
The lien arises automatically upon default, but it does not last forever in its initial form. If the corporation does not register a Certificate of Lien on the unit's title within three months of the default, the lien expires and the corporation loses its priority position. Before registering the certificate, the corporation must first serve the owner with a written Notice of Lien and allow at least 10 days for payment. Once registered, the lien covers not only the unpaid common expenses but also accrued interest and any reasonable legal costs the corporation incurs in trying to collect.
What makes the condo lien particularly significant is its priority. Under Section 86 of the Condominium Act, a registered condo lien takes priority over almost all other encumbrances on the unit, including mortgages. This means the condo corporation's claim can rank ahead of the bank's. Because of this, mortgage lenders often monitor for lien activity and may pay the arrears themselves, then demand reimbursement from the unit owner.
If the debt remains unpaid, the corporation can enforce the lien in the same manner as a mortgage. The process typically begins with a Notice of Sale, which includes a 45-day redemption period during which the owner can still pay the full amount owing. If the owner does not pay, the corporation can file a Statement of Claim with the Ontario Superior Court of Justice seeking possession and sale of the unit. The corporation must then sell the unit at fair market value and return any remaining proceeds to the former owner within 90 days. At any point before the sale, the owner can pay all outstanding amounts and the corporation is obligated to discharge the lien.
Any existing liens on a condo unit will be disclosed in the status certificate, which is why reviewing this document carefully is essential before purchasing. Learn more in our status certificate overview.
