Ontario: A Complicated Lien Process
Ontario, Canada’s most populous province, is home to the most self-storage facilities. It has a lien law that mentions “storage,” though not “self-storage” specifically. The Repair and Storage Lien Act, initially enacted in 1990 and last amended in 2007, serves as the standard for operators, but some see the process as long, complicated and litigious. Tammy Dewhirst, office manager at StorageStop in Windsor, Ontario, says her company adheres to the statute. Fortunately for her, she’s only had to route through the process twice, but one of those incidents is ongoing.
The first step in the process occurs when a tenant has been delinquent for 60 days, Dewhirst explains. In accordance with her facility’s rental agreement, which was written and is updated periodically by a local attorney, the company files a complaint in civil court—in StorageStop’s case, the Superior Court of Ontario. Before and during the proceedings, the facility operator can charge late fees on a delinquent tenant’s account. If the tenant disputes the charges, the court will eventually make a judgment, though how long that takes can vary widely.
The judgment may allow the operator to file lien paperwork with Service Canada, a government agency similar to the U.S. Department of Motor Vehicles. Once the agency has processed the lien, the facility operator has the right to sell the property. However, StorageStop has never had to conduct an auction.
“If we were to get a lien on an indoor unit, then we might do auctions,” Dewhirst says. “But that’s not something we’ve had occasion to do yet. In the case of vehicles, we just sell the vehicle. We put it out front with a sign on it and return to the tenant what’s above and beyond what was owed to us.”
Dewhirst admits the process in Ontario is arduous in comparison to other places. “When I see people who post on [Self-Storage Talk] who only have to wait three months before auctioning off a unit, I’m aghast,” she says, adding that she would like the process to be simplified and expedited. For example, she would like a clause that says if a tenant has not paid in six months, the unit can be considered abandoned. Otherwise, it’s tough for an operator to decide whether it’s worth taking a claim all the way through the process.
“With most of the people who default, we’re not going to be able to recoup all, if any, of the losses,” she says, noting the high cost of going to court. “We’re able to file for recovery of court costs, but if the defendants won’t pay what they owe already, they’re not going to pay for that, too.”