Condominium liens turn up on parcel registers and in status certificates, and someone has to decide whether they are valid before closing. Chiarelli v. Toronto Standard Condominium Corporation No. 2339, 2026 ONSC 4571, released August 7, 2026, answers a recurring version of that question. A condominium corporation cannot lien a unit for the legal costs of enforcing its declaration without a court order under s. 134(5) of the Condominium Act, 1998. No wording in the declaration can change that result.

The owners of a unit at 140 Broadview Avenue in Toronto admitted using it for short-term rentals, contrary to a declaration that banned leases shorter than three months. The corporation’s lawyers sent demand letters in September 2023 and September 2024, and the corporation charged the cost back to the unit. It also charged back $99.95 for replacing a detector in the unit after a fire inspection.

In December 2024 the corporation served a Notice of Lien for $874.06, which was the cost of the second demand letter. It registered a lien securing a total of $3,634.62, including interest and costs. Its letter confirming registration told the owners the fire safety arrears “have not been included in the lien” and might instead be pursued in Small Claims Court (para. 14).

Enforcement costs need a court order

The corporation had a stronger declaration than the one in Amlani v. York Condominium Corporation No. 473, 2020 ONSC 194, aff’d 2020 ONSC 5090 (Div. Ct.), where a similar lien for enforcement costs was invalidated. Articles 2.2 and 6.1 of the declaration said expressly that costs from an owner’s breach were recoverable as common expenses. E. Iacobucci J. accepted that the two declarations were different (para. 32) and held that the difference did not matter. Section 134(5) provides that where a corporation obtains damages or costs in an order against an owner, those amounts are added to the unit’s common expenses together with any additional actual costs of obtaining the order. Under s. 7(5), a declaration cannot be inconsistent with the Act (para. 33). If a declaration could add enforcement costs to common expenses on its own, s. 134(5) would be unnecessary (para. 36).

The Act does authorize some owner-specific chargebacks without a court order. Sections 92(1) and (4) cover repairs the corporation makes when an owner fails to make them. Section 105(2) covers damage an owner causes, up to the lesser of the repair cost or the insurance deductible. The Act contains nothing comparable for enforcement costs (paras. 38–39). The Divisional Court had already endorsed this reasoning in Peel Standard Condominium Corp. No. 779 v. Rahman, 2023 ONSC 3758 (Div. Ct.). As the court in Chiarelli noted at para. 44, Rahman approved the tribunal’s view that Amlani does not allow a corporation “through deft wording of an indemnification clause” to deprive an owner of the day in court that s. 134(5) provides.

The court acknowledged that the declaration could possibly be read as not directly conflicting with s. 134(5), but held the better reading was that it did conflict (paras. 34–37). Its summary is categorical:

In summary, whatever the content of its Declaration, 2339’s legal costs in connection with its efforts to ensure compliance with its Declaration cannot be added to common expenses without a court order pursuant to s. 134(5). Such costs cannot, therefore, be subject to a lien pursuant to s. 85(1). (para. 49)

The $99.95 that couldn’t save it

The corporation fell back on the fire safety charge. It argued that even if the legal costs failed, the unpaid fire charge alone justified the lien and any dispute over the amount could be resolved after a Notice of Sale. The court disagreed. Having told the owners in writing that the fire charge was not in the lien, the corporation could not now rely on it to justify the lien.

Notices need not be perfect under York Condominium Corporation No. 482 v. Christiansen (2003), 64 O.R. (3d) 65 (Ont. S.C.), but that case did not excuse misleading ones:

It is not a standard of perfection that requires 2339 not to mislead the applicants about 2339’s claimed justification for the lien. (para. 66)

The lien was discharged in its entirety. The owners’ oppression claim failed. They had admitted breaching the declaration, and the evidence suggested they had done so dozens of times. It was not improper for the corporation to argue for its reading given its wording (paras. 71–73).

The court ended with a pointed observation. The lien secured less than $4,000, yet the parties together had spent more than $100,000 in legal costs litigating it in the Superior Court rather than in a forum such as Small Claims Court. The court added that it would take this into account in deciding costs (para. 77).

Key takeaways for transactional counsel

1. Ask for the breakdown behind any condo lien or arrears. Chargebacks for legal fees incurred enforcing compliance with the declaration are not lienable without a s. 134(5) order, whatever the declaration says.
2. Distinguish collection costs from enforcement costs. Section 85(1) lets a lien carry reasonable legal costs of collecting unpaid common expenses. What it cannot carry, on this decision, is the cost of compliance letters.
3. Know which chargebacks the Act does allow. Repairs under s. 92, and owner-caused damage under s. 105(2) up to the lesser of the repair cost or the insurance deductible, can be added to a unit’s common expenses without a court order. Classify the charge before advising on it.
4. Acting for a corporation or declarant, don’t rely on drafting to get around s. 134(5). Clauses adding the legal costs of compliance and enforcement to common expenses are inconsistent with the Act to that extent, and clearer wording did not help here.
5. Make the Notice of Lien, cover letters and registration say the same thing. A corporation that tells an owner in writing that a charge is outside the lien cannot later rely on it to hold the lien up.
6. Keep the fight proportionate. When a small disputed lien is holding up a client’s file, remember that costs here passed $100,000 on a lien under $4,000, and the court pointed to Small Claims Court as an alternative.