116 Certificate Of Lien

REGULATIONS, FEES, AND FORMS

The Strata Property Regulation, B.C. Reg. 43/2000, is included at chapter 59 (Strata Property Regulations). The forms prescribed by the Strata Property Regulation are included at chapter 60 (Strata Property Forms). In addition, the Director of Land Titles has approved directions for electronic land title forms and requirements for hardcopy land title forms and plans. See:

1. E-filing Directions, available at https://ltsa.ca/wp-content/uploads/2020/10/E-filing-Directions.pdf.
2. DR 04-11, Hardcopy Land Title Forms. Hardcopy forms are reproduced at chapter 34 (Land Title Forms) and available at https://ltsa.ca/dr_04-11_hardcopy_land_title_forms.

Certificate of Lien, Form G: Section 116(1)

The Strata Property Regulation prescribes Form G, Certificate of Lien, for the purpose of s. 116(1) of the Act.

Acknowledgement of Payment, Form H: Section 116(6)

The Strata Property Regulation prescribes Form H, Acknowledgement of Payment, for the purpose of s. 116(6) of the Act.

Fees

Fee item 2, Charges, in the Schedule of Land Title Act fees applies to the filing of a Form G in the land title office. See chapter 32 (Land Title Fees).

Fee item 5, Cancellation, in the Schedule of Land Title Act fees applies to the filing of a Form H in the land title office. See chapter 32 (Land Title Act—Fees).

PRACTICE

Application for Registration of Form G or H

Submissions

Form G, Certificate of Lien

On the Form 17 Charge, Notation or Filing, select Nature of Interest, Strata Property Act Lien, and attach an image of the original Form G.

Form H, Acknowledgement of Payment

On the Form 17 Cancellation of Charge, Notation or Filing, select Nature of Interest, Strata Property Act Lien, and attach an image of the original Form H.

Effect of Filing Certificate of Lien

A certificate of lien must cover only one strata lot. Additional Form Gs must be filed to place liens on more than one strata lot. The lien is registered as a charge against the title of the affected strata lot.

Effect of Filing Acknowledgement of Payment

An acknowledgement of payment must cover only one strata lot. Additional Form H’s must be filed to release liens registered against other strata lots.

Form H may be used to release a “Certificate of Default in Payment” under the Condominium Act.

CROSS REFERENCES AND OTHER SOURCE OF INFORMATION

Strata Fees

See ss. 99 to 101 of the Act regarding a strata lot owner’s contribution to common expenses.

Special Levies

See ss. 108 to 109 of the Act regarding special levies.

Notice of Money Owing to Strata Corporation

See s. 112(2) of the Act regarding the notice that must be given to an owner or tenant before registering a lien.

Costs Added to Amount Owing

See s. 118 of the Act regarding the costs of registering or enforcing a lien, which may be added to the amount owing to the strata corporation under a Certificate of Lien.

Judgments

See s. 166 of the Act regarding an owner’s liability for judgment against the strata corporation.

Effect of Foreclosure on a Section 116 Certificate of Lien (Form G)

As a general rule, an applicant cannot merge or cancel a s. 116 lien on the filing of a foreclosure order under s. 30 of the Land Title Act. The registrar carries forward the s. 116 lien to the new indefeasible title. To cancel the s. 116 charge, an applicant must file a Form H.

However, the registrar will cancel a s. 116 lien if:

1. a court order has joined the strata corporation as a party and there is specific language in the court order cancelling the strata corporation’s lien; and
2. the solicitor for the mortgagee provides the registrar with a letter stating that the solicitor cannot obtain an Acknowledgement of Payment in Form H because the strata corporation is claiming for items not covered by the s. 116 lien.

CASE LAW

Priorities

In a court-ordered sale of a strata property, a mortgage debt has priority over unpaid strata corporation fines. A lien registered under s. 116 of the Act provides notice to interested parties of the fact and amount of a strata corporation’s claim. Once a lien has been filed, a mortgagee can assess its position and determine whether it will take steps against the mortgagor. As a consequence, the lien represents the full amount which has priority over the mortgage and, by virtue of s. 116 of the Act, the lien excludes unpaid strata corporation fines (People’s Trust Co. v. Meadowlark Estates Ltd., 2005 BCSC 51, citing CIBC Mortgage Corp. v. Spreeuw, 2001 BCSC 1729 (Master); see also the annotations for these decisions under ss. 1 and 34 of the Land Title Act and ss. 116 and 256 of the Strata Property Act).

Amounts Included in Lien

In foreclosure proceedings, the petitioner obtained an order for the sale of a strata lot. The order included a provision for the payment of “any strata fees payable in priority to the interests of registered chargeholders” (para. 4). Section 116(1) of the Act provides an exhaustive list of the strata corporation’s entitlement to a lien. It does not permit charges for bad cheques or late payment fines to be included in the lien. Under s. 118 of the Act, legal costs can be recovered if they are associated with registering or enforcing the lien. The phrase “legal costs” refers to taxable party and party costs. The safeguard provided by an established taxation process is the appropriate protection to afford third parties against excessive charges under the umbrella of a lien. In this case, the services rendered by the management company in registering and enforcing the lien were equivalent to taxable party and party costs and could therefore be added to the lien (Canada Trustco Mortgage Co. v. Gies, 2001 BCSC 1016).

In this action for priority in the recovery of costs, the respondents argued that the court’s decision in Canada Trustco Mortgage Co. v. Gies was no longer good law as it had been rendered obsolete by the decision of the Supreme Court of Canada in Smith v. Alliance Pipeline Ltd., 2011 SCC 7. The British Columbia trial court disagreed, distinguishing the Smith decision on the basis that it dealt with the recovery of costs following an expropriation whereas the Gies decision dealt with the priority of strata fees and costs over the interests of registered charge holders on the sale of a strata lot. The court rejected the respondent’s argument that full indemnification in the expropriation context can be properly extended to the strata property realm. The purpose of ss. 116 to 118 of the Strata Property Act is not to make the strata corporation whole or to determine the full extent of the costs to which the strata corporation is entitled, but rather to determine which costs should receive priority over existing registered charge holders. The court concurred with its earlier decision in Gies that costs entitled to priority by virtue of ss. 116 and 118 of the Act can only be in respect of two specifically articulated activities: (1) registering a lien under s. 116; and (2) enforcing a lien under s. 117. An ongoing dispute over the interpretation of s. 118(a) is not related to either ss. 116 or 117. The costs related to this dispute cannot be considered legal costs under s. 118(a) and thus are not entitled to priority under s. 116. In this case, no steps were taken to enforce the lien, so the only eligible costs were those in relation to the registration of the lien. Following Gies, the court confirmed that the strata corporation was entitled to priority with respect to its costs on a party and party basis and not to its actual legal costs (First West Credit Union v. Milligan, 2012 BCSC 610).

A strata corporation received a single utility bill for a mixed-use residential/commercial property. Rather than including the portion of the bill attributable to the commercial strata lots in the strata corporation’s budget, the strata corporation invoiced the owners of the commercial lots for these amounts. In foreclosure proceedings, the court held that, because the amounts were not budgeted and included in the strata fees payable by the commercial lot owners, they could not be claimed by way of a lien under s. 116 of the Act and consequently they could not be recovered in priority over the secured creditors (Re Pacific Shores Resort & Spa Ltd., 2013 BCSC 480).