The Real Property Limitations Act (the “RPLA”) governs the limitation periods applicable to claims against real property. Generally speaking, this Act imposes a 10 year limitation period on claims against real property. In the condominium context, this 10 year limitation period is typically applicable to actions commenced to enforce condominium liens. [Condominiums effectively have 10 years from the date of default in which to enforce the lien (by way of Court action).]
While the application of the RPLA is relatively straightforward with respect to the enforcement of certain registered interests (such as condominium liens), it is not as straightforward when dealing with liens arising under certain agreements registered on title, for default in payments owing under such agreements (which liens are not specifically registered on title to the affected property).
In the recent case of Toronto Standard Condominium Corporation No. 1487 v. Market Lofts Inc., (“TSCC No. 1487 v. Market Lofts”), the Court found that the 10 year limitation period prescribed by the RPLA is applicable to actions by parties to a shared facilities agreement for any default in payment under that agreement. This is so, notwithstanding the fact that no separate lien is registered for such default (the lien simply arises and exists by virtue of the agreement on title). In the Market Lofts case, the shared facilities agreement specifically contemplated an unregistered lien arising in the event of default in payment of any amounts owing under the agreement. The agreement also confirmed that such a lien was enforceable in the same manner as a mortgage in default.
The provisions of the subject agreement in the Market Lofts case are similar to provisions that we typically see in most shared facilities agreements, or co-tenancy agreements. Accordingly, this case indicates that, generally speaking, enforcement of unregistered liens arising under such agreements may very well be subject to the 10 year limitation period prescribed by the RPLA.