A recent court decision and report by the Law Society of Upper Canada confirms that condominium liens can only be registered by lawyers. Property management companies are not permitted to use paralegals or their own staff members to register or discharge liens.
The Law Society of Upper Canada regulates the practise of law in Ontario. The Law Society began investigating the registration of liens by a property management company after receiving a complaint from a unit owner.
The unit owner in question failed to pay a special assessment for $767.70 because the Notice of Assessment did not initially come to her attention. The management company acting for her condominium corporation registered a lien against her unit in the amount of the special assessment. The matter came to the owner’s attention shortly thereafter, and the owner paid the amount owing under the lien.
The unit owner discovered that the property management company used a paralegal to register the lien against her unit. The unit owner, who is a paralegal herself, was aware that paralegals are not permitted to register liens. The owner reported the matter to the Law Society, which ruled that only lawyers can input and discharge liens.
The Law Society issued a letter of caution to the paralegal but did not start disciplinary proceedings or impose a punishment. This decision could be a result of the fact that the management company had stopped registering its own liens by the time the Law Society issued its report.
The unit owner brought a small claims court action against the property management company for the return of $819.25 in lien fees she paid to the management company. The owner also claimed $25,000 in damages for high handed and unethical behaviour and the unauthorised practise of law.
The trial judge dismissed the lawsuit in its entirety. The judge found that the property managers involved most likely did not know that it was against the law to use a paralegal to register liens. The judge also ruled that only the Law Society can pursue remedies for the unauthorised practise of law.
The trial judge did have kind words for the unit owner. The judge found that the owner should be recognised for bringing a matter of public interest to the court’s attention. The judge noted that the owner had put time and effort into the matter, all at her own expense. Even though the unit owner was not successful at trial, the judge ordered the property management company to pay her $500 in costs.
All property management companies are now on notice that it is illegal for non-lawyers to register and discharge liens. Should this type of dispute come before the courts again, it is unlikely that the next judge will be so lenient to a property management company which continues to unlawfully register its own liens. All board members and property management companies should ensure that their liens are registered by lawyers.
A link to the decision can be found here.