Your security is important to us. We work with our clients to provide convenient and secure methods to pay fees and dues. Unfortunately, secure and convenient are sometimes opposing concepts.
Paying on time
Most people understand the importance of paying every bill on time. It is common knowledge that a late payment, whether for mortgage or a store credit card, will result in a penalty.
Because strata fees and special levies are to pay for important repairs, maintenance or administration of the strata corporation, the Strata Property Act gives the strata corporation special powers to liens against strata lots if any amount of strata fees or levies (including interest) are outstanding. The costs of liens, including registration and legal fees are payable by the strata lot owner. These costs are substantial for even the most simple collections files. If the outstanding fees and costs to administer a lien are not paid promptly, the strata corporation may apply to sell the strata lot and pay the costs from the proceeds of the sale. So, missing a strata payment can have much more significant short-term and long term consequences than missing a payment to your credit card.
Review your bylaws
Many strata corporations and societies have bylaws that require that owners pay by pre-authorized debit. All other forms of payment are either prohibited or require advanced written permission which may impose conditions, such as payment in 12 post-dated cheques. Failure to comply with your bylaws can result in fines by the strata corporation. So, review your bylaws before paying by any method other than pre-authorized debit.
Pre-authorized debit (PAD) is by far the most convenient and secure method of payment. In fact, over 95% of our clients pay their recurring fees by PAD.
This method of payment ensures that payments are made on time and in the correct amount. Other forms require the payer to be perfect with each payment. With PAD, this tedious task is left with us so you don’t have to worry.
Pre-authorized debit is also secure. Before offering pre-authorized debit to our clients, we must agree to terms set by our financial institution and Payments Canada. Payments Canada ensures that financial transactions in Canada are carried out safely and securely.
Pre-authorized debits have lower transaction costs than other forms of payment.
The industry specific software we use is built to prevent data entry errors when processing payment by PAD, resulting is less administrative time and costs.
All these factors together mean lower direct and indirect costs to our clients- resulting in lower strata fees for owners.
Occasionally, fees need to be paid by cheque. This most often occurs during the sale of a strata lot, when fees are paid by an estate of an deceased owner, business reasons, or because the owner has anxiety (reasonably) about pre-authorized debit due to a history with a previous management company that did not have the rigorous policies and software in place that we do to safeguard against an authorized withdrawal amount.
Except when the strata bylaws prohibit cheque payment, this is an acceptable and relatively secure method of paying fees. It is best that recurring fees are paid by a series of post-dated cheques. This is convenient for you. And, because we can setup the cheques in advance to be deposited on the scheduled due date, the administrative costs that need to be passed on to the strata corporation (as part of our management fees) are minimized. Unfortunately, cheque deposits often carry higher banking fees for the strata corporation than pre-authorized debit, especially if yours is the only cheque to be deposited (a deposit with only one cheque is usually the case because most owners pay by PAD).
If you pay by cheque, be certain your cheques are:
- Payable to the correct payee. The payee is typically the strata corporation or society. In some cases the cheque is payable to Inspire Property Management directly (to purchase copies, for instance).
- Payable for the exact correct amount – Be sure to include all of your fees, levies, or other amounts in your cheques. Failure to pay the exact right amount can result in a fine, interest or other penalty. In fact, even an over payment could result in a fine should the strata corporation enforce the bylaws on an owner who over-pays or prepays.
- Payable for the correct date – Be sure to date each cheque for the 1st day the month to which the payment relates. Dating a cheque to be deposited later in the month can result in fines or interest. Accidentally dating a cheque before the due date can result in the cheque being drawn before you expected.
- Promptly delivered – Be sure to mail your post-dated cheques with more than enough time to arrive in the mail. Failure to mail your cheques in a timely manner can result in late payment, and fines or interest charges.
- Signed – Unsigned cheques delays or prevents the deposit to occur as scheduled. Fines and interest can apply as with any other defect that results in a payment not be be made for the correct amount on the correct date.
Delivering correctly written and promptly delivered post-dated cheques can help to reduce the mistakes that happen when writing cheques. For instance, if you carefully write the same payee on all cheques at the same time, you can avoid misaddressing a cheque. Similarly, writing 12 cheques, each dated one month after the previous, you are less likely to incorrectly date the cheque. Delivering all twelve post-dated cheques at the same time will reduce the chances of your payment arriving late due to postal strike or weather event interrupting postal service.
Inspire will accept Interac e-transfer when warranted only. Recurring payments are not acceptable by Interac e-transfer.
This form of payment can be convenient to send funds quickly. But, it comes with several security concerns and administrative costs.
For context, popular financial institutions offer a system to automatically deposit funds sent to a specific email to be deposited to a specific bank account. This can be both secure and convenient for both parties. But, the Real Estate Services Act and Real Estate Rules, the legislation that guides our licensing, requires that we must have certain controls in place to only deposit funds that belong to a particular account. For instance, if you are paying a special levy, we need to deposit those funds into the separate special levy account account for your strata corporation instead of the operating account where strata fees are deposited. So, this reason alone means that enabling auto-deposit could result in a breach of our licensing obligations.
Because we need to process e-transfers manually, that means you must use a password. This has serious security consequences. There is little that can be done if someone who has your e-transfer password, whether because you sent payment to the wrong email address or because the email was intercepted by a bad actor. We use system to prescribe the password to make it difficult to guess- without access to both your email account and ours. This somewhat reduces the risks. But it also increases delays in delivering a payment because of incorrectly typed passwords. We recommend that if you send an e-transfer that you copy and paste the password we give so that we will not have issue depositing the item.
Because of the additional security and administrative costs to process e-transfers, we only offer single e-transfers for owners who need to promptly pay a debt before their next pre-authorized debit or their post-dated cheques arrive in the mail. These costs are considered when we review our management fees for strata corporations which include owners who frequently send e-transfers despite our policies and reminders. Strata councils generally feel it is unfair that their costs should increase because of the choices of a few owners to be “difficult.” Thus, strata councils may be less than friendly when owners continue to pay by this method- and they may choose to apply fines or other penalties.