118 Costs Added To Amount Owing

CASE LAW

With respect to the interpretation of “legal costs”, see the annotation for Canada Trustco Mortgage Co. v. Gies, 2001 BCSC 1016, under s. 116 of the Act.

See also the annotation for First West Credit Union v. Milligan, 2012 BCSC 610, under s. 116 of this Act.

In Strata Plan KAS 2428 v. Baettig, 2017 BCCA 377, the court affirmed that legal costs associated with enforcing a lien under s. 118 of the Strata Property Act are dealt with as court costs pursuant to the Supreme Court Civil Rules, B.C. Reg. 168/2009. The court observed that since “reasonable legal costs” in s. 118 include the legal costs of registering a lien under s. 116, it would make no sense to interpret “reasonable legal costs” to include only party and party costs governed by Rule 14-1, rather than actual legal costs in registering and enforcing the lien, as long as such costs have been reasonably incurred. Doing so would mean that a strata corporation could not recover under s. 118 any costs attributable to registering the lien or other steps taken prior to the commencement of an enforcement action, and the legislature could not have intended that result.

The strata corporation issued demand letters to commercial strata lot owners seeking payments of arrears of strata fees, together with an unspecified amount for legal fees. Owners tendered cheques in payment of delinquent strata fees, but the strata corporation refused to accept the cheques on the basis it was entitled to its legal fees incurred with respect to the issuance of the demand letters. The chambers judge ruled that the strata corporation was not entitled to legal costs. The strata corporation’s entitlement to legal costs does not arise unless and until (1) the strata corporation gives proper notice under s. 112(2) of the Strata Property Act; (2) the strata lot owner fails to pay the strata fees demanded; and (3) the strata corporation files, in due course, a claim of lien also as provided under the Strata Property Act. In the present case, the strata corporation never filed a lien under the Strata Property Act and never commenced legal proceedings to enforce arrears of strata fees. In dismissing the strata corporation’s appeal, the Court of Appeal found the meaning of s. 118 to be clear and consistent with both the scheme and the purposes of the Act. Section 118 does not provide a basis for a strata corporation to recover legal costs incurred in complying with s. 112(2) unless and until it registers a lien and adds the amounts claimed to a certificate of lien (625536 B.C. Ltd. v. Strata Plan LMS 4385, 2021 BCCA 158).