Does a Condo Lien Outrank Your Mortgage in Ontario?
Yes, and it is one of the sharpest priority rules in Ontario real estate. A condominium corporation’s lien for unpaid common expenses can jump ahead of a mortgage registered years before the arrears ever began. This page sets out the rule, the narrow exceptions, and what it means for a borrower, an owner, or a private lender.
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What happens when an Ontario condo corporation registers a lien?
Under section 85 of the Condominium Act, 1998, a condominium corporation has a lien on a unit for the unpaid common expenses the moment the owner defaults, plus all interest owing and the corporation’s reasonable legal and collection costs. The lien arises automatically. No certificate and no court application is needed for the lien itself to exist.
Common expense arrears build the same way any recurring bill does: a missed monthly contribution, a special assessment the owner cannot cover, or a dispute the owner never resolved.
The corporation does not need a judge’s order to secure the debt against the unit. The security exists in the statute the moment the owner falls into default.
The citable fact: Under section 85(1) of Ontario’s Condominium Act, 1998, a condominium corporation has a lien on a unit for unpaid common expenses, interest owing, and its reasonable legal and collection costs, arising automatically on default.
Does an Ontario condo lien really outrank a mortgage registered years earlier?
Yes. Section 86(1) gives the lien priority over every registered and unregistered encumbrance on the unit, and the section says so expressly: the lien ranks ahead “even though the encumbrance existed before the lien arose.” A mortgage registered a decade earlier still falls behind a lien that arose last month. This is a true super-priority, not a ranking by registration date.
Almost everything else in Ontario real estate priority works on a first-in-time basis. Whoever registers first generally wins.
A condo lien breaks that pattern on purpose. The legislature decided that a condominium corporation, which has no practical way to refuse to supply common services to a non-paying owner, needed a stronger tool than an ordinary registered claim.
The citable fact: Section 86(1) of the Condominium Act, 1998 gives an Ontario condo corporation’s lien priority over every registered and unregistered encumbrance on the unit, even one registered before the lien arose.
What can the corporation actually include in the lien amount?
The lien amount is not limited to the missed common expense payment itself. Section 85(1) also lets the corporation add all interest owing and its own reasonable legal costs and collection expenses incurred chasing the debt. A small arrears balance can grow considerably once those costs are added.
An owner who assumes the lien amount equals the last missed payment is usually wrong. Legal fees and collection costs stack on top, and they are part of the same super-priority claim.
A current status certificate is the normal way to see exactly what a corporation says is owed. Our page on the Ontario status certificate covers what that document discloses and how it is ordered.
The citable fact: Under section 85(1) of the Condominium Act, 1998, the lien amount includes unpaid common expenses plus interest owing plus the corporation’s reasonable legal and collection costs, not just the missed payment.
How long does the corporation have to register a lien before it expires?
Section 85(2) gives the corporation a narrow window. The lien expires three months after the default unless the corporation registers a certificate of lien on title within that time. Miss the window and the automatic lien from that particular default lapses.
This is why a title search done the day after a default might show nothing. The lien exists from the moment of default under section 85(1), but it is invisible on title until a certificate is actually registered.
A corporation that lets the three-month window lapse on one default is not barred from starting fresh on the next one. Ongoing arrears can produce a new lien each time the clock resets.
The citable fact: Under section 85(2) of the Condominium Act, 1998, a condo lien expires three months after the default unless the corporation registers a certificate of lien on title within that period.
Does the corporation have to tell my lender a lien exists?
Yes, but only at the point of registration. Section 86(3) requires the corporation to give written notice of the lien to every encumbrancer registered on title, on or before the day the certificate of lien is registered. Notice is not required any earlier in the process.
A lender does not get advance warning that an owner has fallen behind on common expenses. The first formal notice typically arrives at or around the same moment the lien becomes visible on title.
This is one reason lenders and buyers lean on the status certificate process rather than waiting for a corporation’s own notice to arrive.
The citable fact: Section 86(3) of the Condominium Act, 1998 requires the corporation to give written notice of a lien to every encumbrancer registered on title, on or before the day the certificate of lien is registered.
What claims rank ahead of even the condo lien itself?
Section 86(1) carves out three exceptions to the lien’s own super-priority: a Crown claim other than by way of mortgage, a municipal or education tax claim, and a prescribed lien. Those three outrank the condo lien. Everything else, including an older mortgage, generally does not.
The municipal tax exception matters most in practice. A municipality’s claim for unpaid property taxes stays ahead of the condo lien, which is itself ahead of almost everything else on title.
The table below sets out the general ranking on an Ontario condo unit in arrears.
| Rank | Claim | Why it ranks there |
|---|---|---|
| 1 | Municipal or education tax claim | Named exception under section 86(1); ranks ahead of the condo lien itself. |
| 2 | Certain Crown claims, prescribed liens | Also named exceptions under section 86(1). |
| 3 | Condo corporation’s lien | Super-priority under section 86(1); outranks every other registered or unregistered encumbrance. |
| 4 | Mortgages, in order of registration | Ranked by registration date against each other, but all fall behind the lien above. |
The citable fact: Under section 86(1) of the Condominium Act, 1998, an Ontario condo lien’s priority does not extend over a Crown claim other than by way of mortgage, a municipal or education tax claim, or a prescribed lien.
Does this work differently for a private mortgage than a bank mortgage?
No. Section 86(1) does not distinguish between an institutional mortgage and a private one. A private lender’s charge falls behind the condo lien on exactly the same terms as a bank’s. A private lender often has the most to lose, because private files tend to carry less ongoing monitoring of the corporation’s own finances.
A private lender relying on equity in a unit should treat the status certificate as a live document, not a one-time closing formality.
A certificate ordered at funding only confirms the position on that date. Arrears can accumulate afterward, and the lien they create still outranks a mortgage already on title.
The citable fact: The Condominium Act, 1998 draws no distinction between a private mortgage and an institutional one, so a private lender’s charge falls behind a later condo lien on the same terms as a bank’s.
How does Alberta handle the same situation?
Alberta takes the opposite approach. A condominium corporation’s caveat for unpaid contributions ranks by registration date, the same as a mortgage, so an earlier mortgage generally stays ahead of it. Alberta’s trade-off runs the other way: the caveat survives a foreclosure and stays on title until it is paid.
Ontario and Alberta solved the same practical problem, a corporation needing to collect from a non-paying owner, with opposite priority rules.
The table below sets the two provinces side by side.
| Feature | Ontario | Alberta |
|---|---|---|
| Priority against an earlier mortgage | Outranks it, by statute, under section 86(1) | Does not outrank it; ranks by registration date under section 39(7) |
| Instrument registered | Certificate of lien | Caveat |
| Expiry if not registered | Three months after default, under section 85(2) | No equivalent expiry stated in section 39 |
| Survives a foreclosure or power of sale | Super-priority makes survival the normal outcome | Yes, by statute, under section 39(11), even though it did not outrank the mortgage |
Our companion page, condo arrears priority in Alberta, sets out the Alberta rule in full, including why the caveat can outlast a foreclosure even without jumping the priority line the way Ontario’s lien does.
The citable fact: Ontario gives its condo lien a true super-priority over earlier mortgages, while Alberta’s condo caveat ranks by registration date like an ordinary mortgage but survives a foreclosure until paid.
What should a private lender check before funding an Ontario condo unit?
Order a current status certificate and review the common expense arrears it discloses, confirm no certificate of lien is registered on title, and understand that a clean certificate is only a snapshot as of that date. None of that removes the risk that a lien registered after funding will still outrank the mortgage.
A lender cannot contract its way out of section 86(1). The super-priority is set by statute, not by anything written into the mortgage.
What a lender can do is price the risk, monitor the file, and move quickly if arrears appear. Our page on how power of sale works in Ontario covers the lender’s own enforcement options if a mortgage goes into default for any reason, condo arrears included.
The citable fact: A clean status certificate confirms a corporation’s position only as of its issue date; it does not prevent a later condo lien from outranking a mortgage already registered on title.
What should an owner or unit buyer do if a lien has already been registered?
Get a real estate lawyer involved immediately. The amount owing, the options for paying it out, and how a registered lien affects a pending purchase or refinance all turn on the specific certificate and the specific file. A mortgage broker can review financing options once the legal picture is clear.
An owner who sees a certificate of lien on a title search should not assume the amount is small just because the original arrears were.
A lawyer can confirm exactly what the registered certificate covers and what has to happen to discharge it before a sale or refinance can close.
The citable fact: A registered certificate of lien on an Ontario condo unit is a legal document with real priority consequences, and resolving it starts with a real estate lawyer reviewing the specific certificate.
Where can I read more about Ontario condo financing?
This page is part of a set covering condominium ownership and mortgage default in Ontario and Alberta.
- Condo arrears priority in Alberta
- What is a status certificate in Ontario
- How power of sale works in Ontario
The full set lives on the Ask a Broker hub.
Frequently asked questions
Does an Ontario condo lien really outrank a mortgage registered first?
Yes. Section 86(1) of the Condominium Act, 1998 gives the lien priority over every registered and unregistered encumbrance, even one that existed before the lien arose. An earlier mortgage does not protect against this.
When does a condo lien actually arise?
The lien arises automatically on default under section 85(1), without a certificate or a court order. A certificate of lien registered later makes it visible on title.
How long does a corporation have to register the lien?
Section 85(2) gives the corporation three months from the default to register a certificate of lien before that particular lien expires. A new default can start a new three-month window.
What does the lien amount actually include?
Under section 85(1) it includes unpaid common expenses, all interest owing, and the corporation’s reasonable legal and collection costs. It is often larger than the original missed payment.
Does my lender get advance warning before a lien is registered?
No. Section 86(3) only requires written notice to encumbrancers registered on title on or before the day the certificate is registered, not before.
Does anything outrank the condo lien itself?
Yes. Section 86(1) names three exceptions: a Crown claim other than by way of mortgage, a municipal or education tax claim, and a prescribed lien. All three rank ahead of the condo lien.
Is a private mortgage treated differently from a bank mortgage?
No. The Condominium Act, 1998 makes no distinction, so a private lender’s charge falls behind a later condo lien on exactly the same terms as an institutional lender’s.
How is Alberta different?
Alberta’s condo caveat ranks by registration date like a mortgage, so an earlier mortgage generally stays ahead of it. The trade-off is that the Alberta caveat survives a foreclosure and stays on title until paid.
Can a status certificate catch every lien risk before funding?
No. A status certificate only confirms the corporation’s position as of its issue date. Arrears and a resulting lien can arise afterward and still outrank a mortgage already on title.
What should I do if a certificate of lien is already registered on a unit I own or want to buy?
Speak to a real estate lawyer immediately to confirm the amount owing and the options for paying it out. The specific certificate and file determine what has to happen next.
Is the chat on this page an AI bot?
No. Chat on pekoe.ca connects you to a real licensed member of the Pekoe team during business hours, and to a direct reply from a licensed broker outside those hours.
Can a mortgage broker advise on whether a lien is valid?
No. A licensed mortgage broker can discuss financing options once the legal position is clear, but confirming the validity or amount of a lien is a question for a real estate lawyer.
Worried about a condo lien ahead of your mortgage?
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