The Battle Of The Clocks: Dueling Strata Arrears Limitation Period Cases

Limitation periods are a hidden trap for many strata corporation collection efforts. The arrears somehow get lost in the day-to-day running of the strata corporation. Few, if any, strata corporations have systems in place where someone is expressly given responsibility for diarizing when each debt arises and then checking it off as paid or, flagging for attention and follow-up that it is overdue and that a lawsuit has to be brought before the limitation date or it will be extinguished.  When the limitation deadline expires, a debt that was once owed to the strata corporation may not be collectable.  That means that the strata corporation owners will have to make up the shortfall. This can be a significant financial burden on owners who pay their strata fees and special levy payments.

It also means that the defaulting strata lot owner is a “free rider” to the extent of the unpaid debt.  They share in the benefit of all the services and amenities that the strata corporation provides – including common area maintenance, having lights and heat in hallways, having security systems in place, having parking facilities that are secure and garage doors that open and close, having insurance as required under the Strata Property Act (“SPA”), and having a governing body that provides oversight and enforcement of strata bylaw.  It is unfair to those who do responsibly pay their share of strata fees in a timely way to have to carry those who don’t.

Understanding when the limitation clock starts ticking and how to stop it and protect the strata corporation’s position for the benefit of all strata lot owners is critical for every strata corporation in British Columbia to understand.

One would hope that the law was clear and effective in providing that strata corporations could readily manage their way through collecting debts owed by defaulting strata lot owners.  But that is not necessarily the case. That is particularly so for modest amounts owing. Chasing payment of one small debt may not be cost-effective. But if debts accumulate over time, they may well be. A limitation law that bumps each old debt into non-collectability before the total owing is worth pursuing interferes with dealing with them in a practical and economical way.

Two court cases described in this article make clear that it is key to bring court proceedings to collect arrears early. This means a strata corporation should be taking collection steps at a minimum of around the 18 month (or less) mark when the owner’s debt is in arrears so there is enough time to send a demand letter, wait 20 days for the demand deadline to pass, file in the Land Title Office a Form G – Certificate of Lien against title to the defaulting strata lot owner’s unit, and then file in court a Petition to force a sale of the strata lot.  Each of those steps aims at getting the owner and/or a lender to pay the strata arrears owing, plus whatever collection costs pursuant to s. 118 of the SPA.

Two recent BC Supreme Court decisions that come to different conclusions on whether the Limitation Act applies to the collection of unpaid strata fees and special levies.

The Owners, Strata Plan LMS205 v. 0806933 B.C. Ltd., 2022 BCSC 91 (the “2022 Decision”), held that strata fee arrears are not subject to the Limitation Act, although it also held that a claim to enforce a validly filed form G – Certificate of Lien (“Lien”) must be brought within two years of the Lien’s registration.

In contrast, The Owners, Strata Plan KAS 1886 v. Lemon, 2025 BCSC 1166 (the “2025 Decision”) decided that the Limitation Act does apply to strata fee arrears and barred the strata corporation’s recovery where the arrears had fallen due more than two years before court proceedings were started. The 2025 Decision was overturned and remanded back for a rehearing by the Court of Appeal in a decision reported at 2026 BCCA 11 (the “2026 BCCA Decision”). 

Curiously, neither the 2025 BCSC Decision or the 2026 BCCA Decision  refer to the 2022 Decision. The re-hearing of the 2025 decision hopefully will consider the 2022 Decision.

To start, let’s do a brief review of the Limitation Act.  Section 1 defines “claim” as a: “claim to remedy an injury, loss or damage that occurred as a result of an omission”.

The basic limitation period in s. 6 of the Limitation Act applies to bar actions in respect of “a claim” discovered over 2 years after the day on which the claim is discovered. The usual rule for “discovery” is set out in section 8.  It provides that

”…a claim is discovered by a person on the first day on which the person knew or reasonably ought to have known all of the following:

(a) that injury, loss or damage had occurred;

(b) that the injury, loss or damage was caused by or contributed to by an act or omission;

(c) that the act or omission was that of the person against whom the claim is or may be made; (d) that, having regard to the nature of the injury, loss or damage, a court proceeding would be an appropriate means to seek to remedy the injury, loss or damage.”

The key question for both cases is whether the collection of strata arrears through forced sale petition proceedings under s. 117 of the SPA is subject to the Limitation Act. Put simply, does a strata corporation need to send a collection demand letter pursuant to s. 112 and 61 of the SPA, file a Lien, and initiate a petition pursuant to s. 117 of the SPA all within 2 years from when the owner fell into arrears (i.e. the day the strata fees and/or special levy were due and owing), or is the filing of the Lien in the Land Title Office the start of the limitation clock?

At present, the safest answer for strata corporations is that all of those steps required by the SPA to recover strata arrears must be commenced within two years of the owner’s default.  A court proceeding that claims for judgment for the debt owing and enforcement of the Lien collection remedy should, in order to be safe, be started before two years from when the debt first fell due for payment.

The 2022 Decision

The 2022 Decision was made in a petition proceeding brought by the strata corporation for the enforcement of Liens. The owners argued that the strata corporation was barred by the Limitation Act from seeking to enforce collection of the special levy as it had been more than 2 years from when it fell due.

The timing of the collection of the strata arrears is as follows:

1. May 17, 2017 – Special Levy passed;
2. July 15, 2017 – First Installment Due;
3. October 15, 2017 – Second Installment Due;
4. January 15, 2018 – Third Installment Due;
5. February 2018 – First and Second Installment Paid;
6. March 18, 2018 – Demand Notice sent for the Third Installment;
7. May 4, 2018 – Liens filed;
8. November 16, 2020 – Petition filed.

The owners’ argument was that the date of the strata corporation’s discovery of its claim for the unpaid third installment was the day following the payment due date – being January 16, 2018 (s. 8(a) to (d) of the Limitation Act). This was the day the strata corporation knew or ought to have known that the owner had not paid what was owing.

Using that approach, the owners argued that the latest the Petition could have been filed by the strata corporation was two years later, January 16, 2020.  That date was before the suspension of the limitation periods was put in place under any of the ministerial orders under the Emergency Programs Act.

The owners’ argument means that the strata corporation would have been statute barred to pursue the Third Installment arrears because it brought the Petition in November 16, 2020 – over 10 months later than what the owners’ said was the end of the limitation period.

The owners further argued that the payments of the first and second installments on July 15, 2017 and October 15, 2017, respectively, were also 2 years prior to the petition being filed by the strata corporation and thereby could not “save” the strata corporation under s. 24 of the Limitation Act, which allows for a postponement where part payment is voluntarily made, confirming the liability for the whole debt owing.

Aside from the special levy instalment payments, the owner made regular strata fee payments onto their strata account.

The Court found that:

“tendering any partial payment towards the strata’s statement of account is an acknowledgment of debt to the strata, regardless of whether it is a lienable or non-lienable amount given that an owner’s monetary obligations to a strata create a running account, despite that only a portion may then be secured by way of the lien provisions.” (para 49).

The Court went on to draw a distinction between a debt – the running account of the obligations owing between an owner and the strata corporation – and the security, being the Lien by which some of that debt can be collected. The Court further stated that it would cause commercial uncertainty to find otherwise, requiring a strata corporation to maintain multiple statements of accounts according to the different categories of items an owner must pay from time to time to its strata corporations.

Many strata corporations run into collection difficulties when they take a closer look at the owner’s statement of accounts and try to determine which charges are “lienable”, which are not, and when the limitation clock started. This is a common issue because, as the Court pointed out in the 2022 Decision, strata corporations generally do not keep separate statements of accounts for lienable and non-lienable charges. Instead, there is usually one running account showing the total amount owed on the owner’s strata lot.

In the 2022 Decision, the Court reviewed The Owners, Strata Plan KAS 2549 v. 0738039 B.C. Ltd. 2015 BCSC 2273, a case that has been repeatedly cited in Civil Resolution Tribunal decisions for the proposition that fines and penalties claims brought in the BC Supreme Court are not subject to the Limitation Act. As a result, such fines are not barred merely because more than two years have passed.  Thus, for example, where $200 pet bylaw fines were levied – a strata corporation may still pursue those fines even if not paid within two years. However, the “safest” and recommended approach is to collect those fines and penalties within 2 years or less.

The Court in the 2022 Decision considered whether or not a fine or penalty under the SPA differs from an obligation under the bylaws generally (i.e. the bylaw obligation to pay strata fees). Further, the nature of the costs to be paid by an owner to its strata corporation are the owner’s proportionate share of operating costs for its own property. The reality is that owners must pay strata fees for the strata corporation to “keep the lights on”. Owners are, in effect, paying themselves to fund the strata corporation’s budgeted maintenance and operating expenses.

The Court further held that the owner’s obligation to pay its proportionate share of a special levy is not a “claim to remedy an injury, loss or damage” within the meaning of s. 8 of the Limitation Act. As a result, a special levy is not (based on the 2022 Decision) subject to the 2-year limitation period beginning the day after the owner fails to pay the levy by the due date.

The Court went on to state that, even if they are wrong in this conclusion (i.e. their decision could have been appealed, but has not been) the payments made to the strata account (i.e. the payments that were not for the special levy, but for other strata charges) would nonetheless postpone the limitation period under s. 24 of the Limitation Act.

The Court then considered whether the filing of the Lien “started the limitation clock”. It concluded that it did given the wording of s. 15 of the Limitation Act, which is as follows:

15  A claim to realize or redeem security is discovered on the first day that the right to enforce the security arises.

The Court found that a validly filed certificate of Lien creates a floating charge on the owner’s strata lot that captures past and future amounts owing. A floating charge is a form of security, and a Lien constitutes security for the purposes of s. 15 of the Limitation Act such that any action to enforce a Lien under the SPA must be commenced within 2 years of the time the right to enforce the lien arises – namely, under s. 117 of the SPA, within 2 years of the filing of the Lien.

The 2025 Decision and the 2026 BCCA Decision

The 2025 Decision involves a complex, convoluted and lengthy legal battle that has resulted in a number of different court proceedings being brought a 12 year period so far. In this dispute, the strata corporation sought payment of unpaid strata fees.

The BC Supreme Court found that the Limitation Act applies to the unpaid strata fees.  As a result, the strata corporation was barred from recovering strata fees that had fallen due before February 1, 2021, the date two years before this particular court proceeding was commenced.

The Court found there was ample evidence that the claims for the strata arrears were “discovered” more than two years before the petition was filed in February 2023.  The Court said that it was just following what the Supreme Court of Canada had said about “discovery” of claims for limitation period purposes in Grant Thornton LLP v. New Brunswick, 2021 SCC 31 at para. 42: “a claim is discovered when a plaintiff has knowledge, actual or constructive, of the material facts upon which a plausible inference of liability on the defendant’s part can be drawn.”  The “plausible inference of liability” approach, coupled with finding that the exact amount owing did not have to be known, made for a much earlier triggering of the limitation clock than otherwise would have occurred.

Thus, the court concluded that rule precluded recovery. The Court rejected the strata corporation’s argument that it had to wait for the accounting exercise that was ordered by in an earlier court decision by Justice Branch to be completed in order for the limitation period to start running. The Court took it that the strata corporation had already “discovered” that some amount was plausibly owing. The period started to run when the strata corporation had:

• Suffered loss by non-payment of month strata fees (s. 8(a) of the Limitation Act);
• That this loss was contributed by the omission of the respondent not paying the monthly strata fees (section 8(b) – (c) of the Limitation Act); and
• That the Court was the appropriate means to remedy the non-payment of strata fees (section 8(d) of the Limitation Act).

The Court went on to say that the strata corporation had the requisite knowledge to understand that it had suffered loss by the non-payment of monthly strata fees, that the loss was occasioned by or contributed by the omission of the owners, and the court was the appropriate means to remedy the non-payment of the strata fees.

Early in 2026, the BC Court of Appeal ordered the petition be remitted for redetermination in the Supreme Court with the parties having liberty to tender such further evidence as they deemed fit. The BC Court of Appeal found that there were at least two issues to be determined:

1. The limitation defence which will turn upon an examination of the part payments, assessment of their legal effect, and consideration of whether the claims were immediately discoverable by the strata corporation in the few days or weeks following the final payment made by the owners.
2. The net amount owing is unclear.

There was an application to adduce new evidence on the appeal.  That was rejected, but  the BCCA Order returning the case to the BCSC said “the parties should be at liberty to tender such further evidence as they deem fit.”

In the 2022 Decision, the Court had found that partial payments, whether for special levies or regular strata fees, postponed the limitation period under s. 24 of the Limitation Act, as payment of one or the other on what the court took to be a running account, amounted to confirmation of the whole sum owing It remains to be seen whether the Court will have the same conclusion at the re-hearing of the Lemon Decision.

Takeaways…

First, strata corporations should start collection proceedings within 18 months or less of when the owner fell into arrears.  Doing so out of an abundance of caution is a practical response to the confusion over how long the strata corporation has to advance claims to collect unpaid fees because of these two conflicting decisions.

Second, the Limitation Act and the SPA need to be examined by the Ministry of the Attorney General and amendments to the legislation passed by the Legislature so that the process of collecting unpaid fees, levies, fines and any other charges by strata corporations is cleared up once and for all and the expense of litigating limitations and other procedural issues such as those described in this article can be avoided.  The volume of such claims by strata corporations and the efficient operation of both strata corporations and the justice system require no less.