Jason Rivait Partner Miller Thomson LLP
Justin McLarty Associate Miller Thomson LLP
Section 84 Amendments
The Future of the Chargeback Case Law and Differing Interpretations of the Impact of Rulings in Chargeback Cases
Amendments to Section 84 of the Condominium Act, 1998 (the “Act”) are not yet in force, but will drastically alter how condominium corporations process chargebacks. These amendments will hopefully clarify murky case law and some longstanding uncertainties. At this point in time, this is what we know (again, these are amendments to Section 84 of the Act, which are not yet in force): The Chargeback Process If the condominium corporation is charging back an owner, it must provide the owner with notice of such chargeback within 15 days of adding the amount to the contribution to the common expenses for the unit. The key word of the previous sentence is within (not prior to). Similarly, the owner must do any of the
following within 30 days of receiving the chargeback notice: 1. pay the chargeback; or 2. if the owner transfers the unit within the 30 day time period, then: (i) the owner must ensure that the amount of the chargeback is held in escrow; and (ii) give notice to the condominium corporation that the amount of the chargeback is being held in escrow; or 3. apply to the Condominium Authority Tribunal (the “CAT”) if they wish to challenge the chargeback. If an owner applies to CAT for resolution, then they are exempt from paying the chargeback unless a settlement is made or a final order of the CAT is made. If an owner ceases to be exempt (for example, if the dispute is not moved along the CAT process by the owner), then the condominium corporation must send the owner another notice specifying a time by which the owner is required to remit payment.
Any notice that is sent to the owner relating to a chargeback must specify a time by which the owner is required to pay the amount in accordance with the regulations. Date of Chargeback There are some longstanding questions regarding the date of the chargeback (or the date of default pertaining to a chargeback). Is it the date of the incident, the date of the invoice, the date of the demand for payment or the date it is added to the unit ledger? An owner who does not pay the chargeback or apply to CAT within the required timeframes is deemed to be in default. In this regard, the owner has 30 days to make payment or otherwise apply to CAT for resolution, failing which they are in default and the clock starts ticking from that day for registration of lien purposes. When dealing with a transfer, if the owner does not hold the money in escrow and CONDOVOICE SPRING 2021
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ILLUSTRATION BY JASON SCHNEIDER
There have been plenty of articles written about chargebacks within the past year. Much of the discussion has revolved around case law and differing interpretations of the impact of the rulings in those cases.
