Arrears and interest

Arrears are the most common financial problem a strata corporation has, and the one most damaged by delay. A lot that's two months behind is a conversation. A lot that's two years behind is a lien and a lawyer.

Finding who's behind

FinancesOwner accounts — the corporation's receivables ledger, and the page this decision is made from.

A single figure can't carry it. "Outstanding from owners: $7,149.92" is one lot four hundred days late, or it's forty lots five days late, and it reads identically either way — while the two ask for opposite decisions. So the page ages it.

Four figures across the top:

Below them, every lot with its balance split into current, 31–60, 61–90 and over 90 days, oldest arrear first. A settled lot stays on the list saying so rather than disappearing, so a council checking a lot it believes is paid up finds it. Click any lot for the postings behind its figure.

LotCurrent31–6061–90Over 90

101——$412.00$3,071.29

204$412.00$412.00——

305———Settled

How the ageing is worked out

Worth reading once, because the numbers are quoted to owners and printed on certificates.

• Payments settle the oldest charge first. A lot that pays one month while two are outstanding shows as late on the remainder, not as current. It's the same allocation the lot's own ledger, a Form B and the interest run all read — they can't disagree with each other.
• Ages run from the due date, where a charge has one. That's how overdue is reckoned for interest too, so a lot can't be overdue for interest and current for ageing on the same day. A charge with no due date recorded ages from the day it was posted — worth fixing.
• A cancelled charge relieves the charge it names, not the oldest one. Otherwise the same balance would tell the opposite story.
• A reversed payment restores debt as old as the debt the cheque appeared to settle. A bounced cheque doesn't reset a 120-day arrear to current.
• Credit is never netted against arrears — not within a lot, and not across the corporation. One lot paid ahead does not reduce what another owes, which is why "held in credit" is reported beside the total rather than inside it.
• Today is the corporation's today, on its own time zone, so an arrear tips from 90 to 91 days on your calendar rather than the server's.

Interest on overdue fees

The interest panel

FinancesOwner accounts, above the lots it charges — which is the same list that carries their ages, and interest is charged by age. (It used to sit on the finance overview, one screen away from the balances it moves.)

It answers three questions before you press anything: whether your bylaws permit interest at all, what's actually overdue, and whether you've already run it this period.

If your bylaws set no rate, there's no button — only the reason and a link to the one setting that changes it. Pressing something could never have fixed this, and the panel says the part that costs money if you learn it late: a rate recorded today cannot recover interest for the period before the bylaw passed.

That reminder can be dismissed, and only that reminder. A corporation whose bylaws set no rate may take a couple of years to pass one, and being told the same thing on every visit for two years is how a page teaches people to skim it. Dismissing changes nothing about the fact, and it's remembered per browser — the control itself is never dismissible.

If a rate is on file, the panel states the rate and its compounding, and the date interest was last charged — which nothing else in the product tells you. Then Review interest due shows exactly which lots would be charged and how much, and the confirm button names the total. Nothing posts until you confirm.

Enter your bylaw's rate under SettingsFinancial controls. It's blank by default, and ManageStrata won't let you enter a rate above the 10% cap.

Interest accrues on the outstanding principal from the due date, so a part-paid invoice accrues on what is actually still owed. It lands on the lot's ledger like any other charge, and the owner sees it in their portal.

Running it twice charges nothing twice: only interest not already posted is charged, so a second run on the same day posts nothing. The ledger was always safe that way — what the panel adds is the date it was last charged, so you can see it without going and checking.

Two mechanisms are commonly confused with this one, and neither is a collections tool:

A flat "$50/month late fee" is recoverable under none of these. It is also not a lien-able amount under s.116, so it cannot be enforced through the lien route below — and an unauthorised charge sitting on a ledger weakens the corporation's position on the arrears themselves.

Before you fine anyone

A fine is not a collections tool for unpaid fees. For those, use the interest your bylaws authorise and the s.116 lien.

Being consistent

Apply interest to everyone or to no one. Selective enforcement is the single most common reason a corporation loses an arrears dispute — and it corrodes the council's standing with owners far faster than the charges raise money.

If council decides to waive interest in a particular case, minute the decision and the reason, then cancel the charge with that reason recorded. That's a documented exercise of discretion, which is defensible. A quiet deletion is not.

Automatic arrears reminders

SettingsFinancial controls → Email arrears reminders. Off by default, and deliberately so.

With it on, a lot that falls behind is emailed at 14, 30, 60 and 90 days past due, then once a month for as long as the arrear stands. What changes between stages is how long the message says this has gone on and how plainly it asks the owner to make contact. What never changes is what the corporation is about to do.

Four things these reminders never say, each of them a deliberate absence:

• No late fee. BC has none.
• No fine. A fine needs the full s.135 procedure, is void without it, isn't lien-able under s.116, and isn't a collections tool.
• No lien, at any age, for the reason above.
• No interest unless your corporation has recorded a bylaw rate. With no rate on file there is nothing to charge and nothing to mention, and "interest may apply" would be a threat you couldn't carry out.

An escalation that works

1. A reminder, at 30 days

   Assume it's an oversight, because it usually is. State the amount, the period, and how to pay.

2. A formal notice, at 60 days

   Reference the bylaw, state the balance including any interest, and set a date. Note what happens next.

3. A council decision, at 90 days

   Discuss it at council and minute the decision. This is the point to consider a payment arrangement — most owners in genuine difficulty will take one, and a paying arrangement beats an unpaying judgment.

4. Legal steps, beyond 90 days

   Lien registration under s.116, and the enforcement the Act provides. A lien covers strata fees, special levies, s.85 remediation costs and judgments — not fines, user fees or chargebacks. Take advice; the process is procedurally strict.

Payment arrangements

Where an owner is genuinely struggling, a written arrangement is usually the corporation's best outcome.

• Put it in writing, with amounts and dates.
• Get council approval and minute it.
• Record each instalment as it arrives, so the ledger tracks the arrangement.
• Be clear about what happens if it lapses.

Voting rights

In BC an owner in arrears loses their vote only if three conditions are all met. Councils routinely apply this as though it were automatic, and it isn't.

1. Your corporation has passed a bylaw saying so (s.53(2)). Without one, an owner in arrears votes normally.
2. The debt is one you could register a lien for under s.116 — strata fees, special levies, s.85 costs, or a judgment.
3. The matter isn't one needing an 80% or unanimous vote. The restriction never applies to those.

Critically, fines, user fees and the cost of remedying a contravention are not lien-able, so an owner who owes only fines keeps their vote regardless. A council that strikes a fined owner off the voting list has invalidated the vote.

Check the bylaw and the make-up of the debt before the meeting, not during it — a vote wrongly excluded is grounds to overturn the result.

Preventing arrears

Cheaper than collecting them:

• Make paying easy. Removing friction is the single most effective measure available — a standing e-transfer or pre-authorised debit today, card payment when it arrives.
• Bill on the same date every period, so owners can set a standing transfer.
• Remind before the due date, not after.
• Announce fee changes early, and tell owners on automatic payment to update the amount — otherwise they fall behind by the difference every month without realising.

Writing off

Occasionally a balance is genuinely uncollectible — an owner has gone, the lot has been sold, enforcement has run its course. That's a council decision, minuted, then recorded as a correction against the ledger with the reason. It never becomes a deletion; the history of the debt and the decision to write it off both stay visible.