Property ownership in the contemporary society is becoming more difficult especially with the growing trend of urbanization in most areas. However, there has been a rise of various interventions that seek to handle the challenge of inadequate land for most people to construct their houses. The development of apartment buildings and other condominium settings has allowed most individuals to share a common property with the separation in housing units. There are many legal requires that those people need to adhere to as a way of facilitating coexistence in such arrangements. The interest is in establishing the challenges that relate to liens on a property due to violations of different parts of the agreement regarding the financial obligations of the respective owner. The Land Contracts (Actions) Act (LCAA) states that a corporate can enforce a lien in the same manners as that regarding a mortgage.That raises confusion on whether the condominium corporation that an owner owes becomes a mortgagee in the event of a lien. It is important to clarify that, in this instance; the firm does not take the place of a mortgagee when initiating a sales process.
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The challenge in this investigation is to determine whether a condominium corporation becomes a mortgagee upon enforcing a lien for the owner of a housing unit that holds an ongoing mortgage.
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According to the Condominium Act of 1998 in Canada, the corporation managing the housing units reserves the right to enforcing a lien upon the violation of the payment deadlines.However, it must provide warnings to the owners that are failing to deliver on their obligations as from the first month of defaulting. The lien comes in the third month and covers only three months from the day the corporation enforces. Therefore, if the owner of a housing unit defaults for four months and the entity implies the lien on the fourth, they lose the arrears that the individual owes for the first one. The common complications that arise involve instances where those owning the housing unit all have mortgages to pay.
The law provides that the lien on a housing unit takes priority over any other charges; therefore, the owner has to pay to the condominium corporation before the mortgage financiers. As a result, most of those institutions mortgaging the property will chip in to settle the costs of the lien to maintain their priority from the owner. However, that comes with an extra charge in interests and other operational fees that extend to the underlying payment. Most institutions pursue this direction to maintain their business balance and prevent any further litigation for the owner as the arrears might lead to even further court battles. That is because the lien will present even further charges in legal fees among other costs relating to the operations of enforcing them. It is still advisable for the owner of the condominium to pursue this path to settling the issue rather than allowing the arrears to the corporation to keep growing as that puts them in the danger of losing the property.
The Condominium Act introduces a complication in the statement that a moderating firm can enforce a lien in a similar methodology to that of a mortgage.The law also allows the property moderator a right to sell the unit if the owner defaults to a level that is intolerable. Therefore, if the individual fails to settle the lien, they risk losing their condo to the litigation that the corporation holds against them in arrears. There are further legal costs that the individual has to settle to facilitate the case, and that leads to an increase in the overall cost of the whole venture. However, the confusion that the investigation seeks to deal with is the manner of the procession if the owner holds a mortgage for the property.
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In the LCAA, the law provides that a mortgagee cannot establish any action regarding a property without the presence of a grant from the court.The implication from this provision is that the owner of the housing unit cannot sell it unless there are due notifications in a legal process that involves the financier to facilitate the transaction. If the individual proceeds with such an action, the law considers it a nullity; therefore, the person cannot transfer ownership to the buyer or any other such recipient. That protects the financier from any losses that may occur from non-transparent transactions and enables them to maintain their payments regarding the mortgage of the property. The law also provides all other forms of activity in this coverage to ensure that the institution providing the mortgage is aware of every transaction relevant to the property to prevent any further incidences that may raise its costs. For example, an individual may default their obligations to the condominium corporation and fail to notify the organization to make duly financial adjustments on that, and it eventually raises the cost when settling them. Therefore, any notice of lien should also fall into the category of an action and should go through the legal process that includes notifying that financier on the relevant litigation.
The biggest challenge lies in determining who holds the position of the mortgagee if a condominium corporation decides to sell the property to recover the outstanding arrears. The law provides that entity the right to the sales of a property that has an outstanding and unattended lien over it. In this provision, the statute also allows the condominium to enforce the lien in the same manner as a mortgage. In this case, then, it is important first to determine whether the entity will displace the owner and become the mortgagee as a way of establishing their involvement. The first consideration in this instance is that the law states that any action that an individual holding a mortgage takes on the property must go through a court and under a statutory grant. Therefore, the financier should be well aware of the history of the lien and the inability of their client to settle it. They will then take part in the court processes to determine who will take liability for the expenses of the mortgage after the condominium corporation sells the property. Under mortgaging laws, the court determines whether the sale of the housing unit is capable of settling the outstanding debts that the owner holds before conducting any transaction. However, the condominium corporation does not become the mortgagee as it enlists the services of lawyers in a court of law to oversee the sale of the property to settle the debts. It only acts as a recipient of the proceeds with only the right to initiate the selling and legal processes.
It is evident from the provisions of the law that the presence of all actions regarding the property that is on a mortgage must involve the lender in all steps. The statutes also provide that the owner has to cater for various costs that are pertinent to the legal processes. The condominium corporation only takes the position of a claimant when selling a property to settle arrears from a lien. The owner of the unit retains their place as the mortgagee and negotiates with the lender to determine how the sales of the property will cater for the amounts they owe.