Recovering the Strata Corporation’s Legal Costs on a Foreclosure

First West Credit Union v. Milligan, 2012 BCSC 610

This foreclosure decision sheds further light on the costs that a strata corporation can recover under s. 118 of the Strata Property Act (SPA) for placing and enforcing a lien under ss. 116 and 117.

The petitioner Credit Union obtained an order for sale in foreclosure and the strata subsequently registered a lien to secure the owner’s debt for unpaid strata fees. The Court later approved the Credit Union’s sale of the unit and the strata claimed the amounts owed under the lien, including its full legal fees and disbursements incurred in pursuing those amounts.

The Court held that the strata’s costs of registering a lien under s. 116 and applying to the court for an order for sale under s. 117 were recoverable under s. 118 and should be estimated by applying the tariff for a party and party costs set out in the Rules of Court. Since the Credit Union had applied for and carried out the order for sale, the strata were entitled only to its assessable costs for registering the s. 116 lien and no amount for enforcing the lien under s. 117.

The Court’s very narrow interpretation of “reasonable costs” in this case did not include any assessable fees and disbursements for the extensive negotiations that took place between the Credit Union and the strata as they tried to work out which charges would be included under the SPA lien.

This decision will impact strata collections practice as the number of distressed properties and bank foreclosures increase. Stratas can best protect their interest by letting a bank expend time and money foreclosing on an owner once the strata have established its priority interest by registering a lien on the property.

Practically speaking, where a property is slated for or actively in foreclosure by a lender, strata will want to limit the time and effort they spend enforcing a lien. In our collections practice, we communicate directly with any mortgage and judgment holders on a strata property in arrears to determine if the property may go into foreclosure. This allows us to be prudent in gauging how much time and expense we put into collecting arrears when a bank foreclosure or judgment recovery is happening.

Read the full reasons for judgment here.

WHAT WE DO: Lesperance Mendes advises property managers, strata corporations and owners on matters of strata fee and special assessment levy collections. Our lawyers have successfully collected arrears for strata corporations via negotiation with owners and mortgage providers and forced sale of properties using procedures under the Strata Property Act. For more information about our strata law practice, visit our strata law page or contact Paul G. Mendes at 604-685-4894 or

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