Post by: David Sunday
A new provision has been added to Ontario’s Construction Lien Act (section 33.1) to require a Form 24 – Notice of Intention to Register A Condominium to now be published shortly before a condominium description is submitted for approval.
The legislative intent behind section 33.1 appears to be an effort to provide potential lien claimants with notice that a condominium registration is about to occur – the theory being that they will then have the opportunity to register a lien before registration happens.
In the Form 24 notice, the developer is to list the name and address of each contractor that supplied services or materials to the condominium development during the 90-day period leading up to submission of the plans for approval.
While the requirement seems innocuous enough at first glance, the practical reality is that Form 24 is proving to be quite costly. It also appears as though it will only benefit lien claimants who subscribe to and read the Daily Commercial News, where Form 24 notices are required to be published.
For any project where the condominium developer is contracting directly with trades, the list of contractors, combined with their contact information, tends to be quite long.
Last time we checked, the Daily Commercial News was charging $4.32 per 1/14 of an inch of a 1.625 inch wide column. In our experience, Form 24 will often run to 40 inches or more of column, which translates into a publication cost of roughly $2,400.00 before taxes.
Depending on the number of contractors, the cost can be higher or lower, but our experience to date suggests $2,000 – $3,000 is a fairly typical cost where the developer has been contracting with trades directly.
The Form 24 requirement is mandatory and there is the potential for civil liability if the requirement is not complied with. Thus, condominium developers can be held liable to any person who suffers damage as a result of their failure to give a proper Form 24 notice.
Condominium developers now need to factor in the Form 24 cost into their development plans or make a business decision as to whether the high publication costs outweigh the risks of increased civil liability if the requirement is not complied with.
It appears that the legislature did not appreciate the significant added cost that this requirement would add to condominium projects and has not balanced that cost against the limited, if any, benefit this new requirement provides to lien claimants.