A colleague at work showed me a form that one of her clients — a prospective tenant– had been asked to sign by a property management company. In it, the tenant agreed they could be required to pay the landlord’s arrears of condo fees. “Why would anyone in their right mind sign this?” she asked me.
But it turns out that a tenant can, in fact, be called on to pay a condo owner’s arrears.
The condominium corporation has the right to require the tenant to pay under s. 87 of the Condominium Act. Here’s what the legislation says:
Default with respect to leased unit
87 (1) If an owner who has leased a unit defaults in the obligation to contribute to the common expenses payable for the owner’s unit, the corporation may, by written notice to the lessee, require the lessee to pay to the corporation the lesser of the amount of the default and the amount of the rent due under the lease.
And if you think about it, that makes sense. If someone doesn’t pay the arrears, the condo corporation can take steps to take back the unit, which means the tenant would be evicted.
By requiring the tenant to pay the arrears or the rent, which is ever is less, to the condo corporation, the tenant gets to stay. But in almost all cases, the rent will be more than the monthly condo fees.
If a tenant does pay the arrears, the good news is that they are deemed to be rent, so really all that changes is that instead of paying that portion of the rent to the landlord, the tenant pays it to the condo corporation. Again, there’s what the legislation says (same section):
No default in lease
(6) The payment to the corporation shall constitute payment towards rent under the lease and the lessee shall not by reason only of the payment to the corporation be considered to be in default of an obligation in the lease.
After being served with written notice, the tenant pays the landlord’s arrears, the tenant gets to stay in the unit, the landlord doesn’t lose the unit for non-payment, and the condo corporation gets paid. It’s actually an elegant solution!