I own a condo, and am struggling to make the mortgage payments. What if I fall so far behind I can’t catch up?

Sorry to hear about your tough situation. Money troubles are stressful on their own, even more so when your home is on the line.

If you default on your mortgage (such as by not making payments as promised), the lender can go to court to take the condo or sell it to pay the debt. This process is called foreclosure. 

That said, following a missed mortgage payment, you won’t automatically lose your condo. Lenders don’t want to foreclose if they don’t have to, as it’s an expensive process and takes time. A lender will likely not start to foreclose until after two or three months of missed mortgage payments. Plus, they must send you a demand letter before they can start legal proceedings to take your condo. (We explain the process here.)

Steps you can take

If you think you’ll be able to get back on track with your mortgage payments, consider reinstating the mortgage. This means paying what you owe to get the mortgage back in good standing. You can reach out to your bank to discuss how you’ll catch up on your payments. They may agree to adjust the terms of the mortgage to help you. For example, by agreeing to take smaller payments for a short period of time. See our guidance on if you’re having difficulty paying your mortgage.

Special rules apply to condos

In the meantime, it’s important to keep up with your strata fees. That’s because in BC, special rules apply to mortgage payments on stratas. To bring the mortgage back into good standing or to redeem it (pay the mortgage off in full), you must first pay any amounts owing to the strata. This includes monthly strata fees and any special levies. A special levy is money a strata corporation collects from strata lot owners to pay for a specific purpose, like roof repairs.

If you don’t pay outstanding strata fees or special levies, your strata can register a certificate of lien against the property’s title. Under the law, the lien takes priority over most other charges on title, including any mortgages. Once a certificate of lien is registered, your strata can apply to the BC Supreme Court for an order for the sale of the strata lot. Legal action brought by your strata is separate from any foreclosure proceedings the lender may bring against you for defaulting on your mortgage.

Additional steps you can take

Have a look at your monthly budget, and see if you can cut back your spending in other areas. Make paying your strata fees a priority, since falling behind could lead to a lien being filed against your property. 

You can also consider raising the issue with your strata council. Decide on a reasonable payment schedule and propose it to them in writing. This can give you some breathing room while you get your finances in order. Just make sure you can stick to the schedule — failing to meet the terms of the new arrangement could make things worse. Check out these pages on getting out of debt for more guidance.