A seller is $6,000 behind in common expenses, and the corporation has registered a certificate of lien after giving proper notice to the seller's bank. How does the lien rank against the bank's first mortgage, which was registered years earlier?
Correct Answer
A) It ranks ahead of the mortgage, even though the mortgage was registered first
Section 86(1) of the Condominium Act, 1998 gives a common expense lien priority over every registered and unregistered encumbrance, even one that existed before the lien arose, subject to a few exceptions such as certain Crown claims and municipal taxes. Because the corporation gave the bank notice as s. 86(3) requires, the $6,000 lien keeps that priority.
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