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How to collect money owed by housing co-op members

The management of arrears and what housing co-ops can do when members owe money.

Show Guide Chapters
  • Co-operative housing guide
  • Key documents needed to form a housing co-op
  • How housing co-ops make decision
  • How new members are admitted to housing co-ops
  • Member obligations to the housing co-op
  • Obligations of the housing co-op to its members
  • Governing legislation for housing co-ops
  • How to collect money owed by housing co-op members
  • How to evict a co-op member
  • Provincial/territorial housing co-op regulations

Housing co-ops use the term “arrears” to cover all the different payments owed to them by members. In addition to the monthly housing charges, co-op members could owe money for:

  • damages to co-op property
  • fines
  • key charges
  • bank charges for not-sufficient-funds (NSF) cheques
  • maintenance guarantees

The management of arrears by a co-op may be described in the co-op act for each province and territory. Most housing co-ops also specify the process for arrears collection in their rules or bylaws. Members should check the rules or bylaws so they know exactly how their co-op collects money owed.

Notify the member

The co-op should start the arrears collection process by sending a letter to the person owing money. This letter should clearly explain the facts and ask that the money be paid right away, including any interest owing.

The co-op should keep a copy of the letter for its records. Doing so will help support the case if it’s referred to a collection agency or small claims court later on.

Arrange a payment schedule

Sometimes, a member wants to pay their arrears but is simply unable to do so at that moment. In this case, the co-op should arrange a payment schedule, also known as “scheduled arrears” or a “special payment arrangement.”

Evict the member, if necessary

If a member can’t or won’t pay their arrears, co-ops can choose to evict the member and recover what’s owed. Money may be recovered from current or past co-op members. Even if the person pays what’s owed, the co-op may still end their membership or take back their unit.

Refer the case to an agency or small claims court

A member's deposit alone is often not enough to cover the debt. In this case, co-ops can register the debt with a credit agency or collection agency. They can also sue the member in small claims court, which offers a simple, inexpensive way to collect outstanding debts.

Previous Governing legislation for housing co-ops Next How to evict a co-op member

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Date Published: June 3, 2018
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