Is there no end to condo problems?
How did things get so bad at Canterbury Village in North Providence?
Nearly 80 people were evicted after the city condemned the property. Residents accuse the condominium complex’s property management company of negligence—and the company’s president and his wife controlled the condo association’s board.
—Boston Globe
‘It’s just not feasible’: North Providence residents given eviction notices after town condemns condos
WPRI.com 12
by: Sarah Doiron, Matt Paddock
Updated: 17 October 2023
NORTH PROVIDENCE, R.I. — Dozens of residents living in North Providence’s Canterbury Village have been left scrambling after receiving a 24-hour eviction notice.
North Providence Mayor Charlie Lombardi confirmed that the town’s building inspector and fire department condemned the condominiums due to the deplorable conditions inside.
Lombardi tells 12 News it started with a pipe that burst back in February, causing significant damage throughout the condominiums. He expressed his frustrations with Vista Management, which maintains Canterbury Village.
“We couldn’t get them to cooperate,” Lombardi explained. “We had to take them to court, and then they agreed to hire an architect, but they still haven’t done that.”
“This decision wasn’t easy, but God forbid something happened,” he added.
North Providence Assistant Fire Chief John Horan described the safety hazards within the condominiums as “shameful.”
“When we got there, what we saw was deplorable,” Horan said. “It’s just not a safe environment at all.”
Horan said the town not only uncovered asbestos while inspecting the condominiums but also discovered that an egress corridor in one of the buildings was “severely compromised.”
Janet Clark, who has lived at Canterbury Village for two years, fought back tears while explaining her situation to 12 News.
“It’s just not feasible,” Clark said. “Even if you could find a moving company, it wouldn’t happen in 24 hours.”
“I have health issues,” she continued. “I have nowhere to go and I’m alone.”
Richard Wessen, a three-year resident of Canterbury Village, echoed Clark’s concerns.
“In my opinion, this is very inhumane,” Wessen said.
Lombardi pinned the blame squarely on Vista Management, who he believes should’ve never put their tenants in this situation.
“Let me be blunt,” Lombardi said. “The people who were responsible for straightening this out … they should be arrested.”
“This isn’t right and it’s not fair, but the town can’t just sit back and allow this to happen,” he continued. “This is for their safety.”
Though Lombardi stressed that the management company is responsible for assisting their residents in finding somewhere to stay, the fire department has called in the American Red Cross to assist.
12 News attempted to reach out to Vista Management by phone several times regarding the situation but was unable to connect.
Canterbury Village residents have until 3 p.m. Tuesday to pack up their belongings and vacate the premises, according to the eviction notice.
I read the headline from the Boston Globe and I wondered how, within the same month, we could we have two awful situations where the property management company also controlled the condo board . We are getting too close to Halloween.
Leaky Kitchener condo tower stalls before completion, leaving a legal, financial mess
The Record
By Jeff Outhit
25 October 2023
KITCHENER — Developers pre-sold every condominium but still ran out of money to complete a 15-storey tower, leaving a leaky hulk, a big hole and a legal mess in east Kitchener.
Construction stopped in July on the first tower of the Elevate project at 1333 Weber St. E. The tower is 80 per cent complete and “the roof is not watertight, which could lead to significant damage to the project with winter fast approaching,” a Toronto judge found in ordering the development into receivership on Oct. 12.
The site also has a large hole where work had begun on excavation for three other towers. The property is beside the Highway 8 expressway, not far from the Franklin Street overpass.
Developers Werner Leuschner and Kamal Patel launched the project that was supposed to begin occupancy this past spring. Court documents indicate all 177 condos in the unfinished tower were sold, along with 325 units in towers not yet built.
Buyers agreed to pay an average of $470,000 for condos in the first tower, according to a list of buyers and prices. Down payments averaged $92,000.
Developers Werner Leuschner and Kamal Patel launched the project that was supposed to begin occupancy this past spring. Court documents indicate all 177 condos in the unfinished tower were sold, along with 325 units in towers not yet built.
Buyers agreed to pay an average of $470,000 for condos in the first tower, according to a list of buyers and prices. Down payments averaged $92,000.
“The evidence shows that, at present, the project is stalled. Trade contractors have left the site. It is unclear if the site is secured,” wrote Justice Peter Cavanagh of the Superior Court of Justice. “In the circumstances, I am satisfied that it is just and convenient to appoint the receiver.”
Receivership assigns property control to a court appointee who can sell assets to pay outstanding debt. Creditors intend to secure the property and sell it to recover loans. Lenders are owed at least $64 million, Cavanagh said, and debts are still mounting.
A lawyer acting for the developers declined to comment.
Kitchener council approved the ambitious project in 2020. It’s on the site of a demolished Howard Johnson hotel, wedged between a Beer Store and Hiway Zehrs.
Plans include two other towers at 12 storeys each and another tower at 15 storeys, for a total of 570 residential units.
Read the rest of the article here.
Reddit Kitchener has posts about this project here.
More on YCC #25 & Pink Piggy Investment Group Inc
This is the bottom part of the Globe and Mail article that I wrote about in my last column. I did not have this part last week.
Norbert (Bert) Berger is the president of L & H Property Management Inc. and has been the condo manager for YCC #25 since 2015 (originally for a different management company). He said Mr. Holt’s letter was “completely false” and denied that he had invested the funds: “I don’t have access to the funds, the corporation’s board of directors did.”
In a copy of the Pink Piggy certificate attached to Mr. Holt’s letter Mr. Berger’s name and signature appear as the “chairman of the board” signing on behalf of Pink Piggy. The contact information on the document also includes an e-mail for Mr. Berger and the phone number for L & H’s office.
Mr. Berger declined to answer questions about who is behind Pink Piggy or whether he had any financial relationship with the company, but said he had been in contact with its principals.
“I know for a fact that the people that they dealt with will not be stiffing them for anything,” said Mr. Berger, who said Pink Piggy offered 12-per-cent interest on the promissory note that matures in November, 2023. “I contacted Pink Piggy ... [YCC 25] will receive their money.”
He acknowledged the payment to Pink Piggy happened but suggested there had been “no harm, no foul.”
You say it’s a violation of the Act
“So there’s a violation of the Act? Let’s just assume that. You say it’s a violation of the Act. I’ve had other people look at it and they don’t necessarily agree,” Mr. Berger said. “Just because it says something in the Act doesn’t mean that the Act can’t be changed or interpreted in a different way.”
Sure investing with Pink Piggy is a violation of the Act and maybe Bert Berger has an interest in Pink Piggy. So what? Exactly what will happen to Bert?
It depends on the Board of Directors of YCC #25. It’s possible they are are happy with Mr. Berger’s performance as their property manager. It is equally possible that the present board will remain in office after the ongoing court challenge is heard.
Bert says there was no harm, no foul and that may end up being the case.
No one wants to be on the board
I recently received this query from a reader.
“Here is a question for you. What happens if there is no one who wants to run for the board and there are no board members?”
I replied:
“I have never heard of this before. I am not sure, but this is my best guess.
The management company would have to put out an appeal for directors. It depends if the directors need to be owners or if anyone who is sane and not in bankruptcy can apply. If there are no restrictions then they just have to appoint the minimum number of directors, either two or three. I could even be appointed. (There is no pay but all my expenses to attend monthly meetings would need to be covered.)
If that was not successful, then management would have to contact the corporation's lawyer to apply to Superior Court for the appointment of an administrator.
It would be best to get an opinion from a lawyer that is experienced in condo law.”
Wrong answer?
After thinking about this, I realize that this may not be the ideal answer.
In this situation, the management company could appoint three people to the board. Any three people will do. The manager’s spouse, friends or neighbours are good choices. That way, the corporation continues to function. Cheques get signed so the contractors and the utilites continue to get paid.
As soon as the new directors have been appointed, send their names to the owners by Canada Post or email. Tell them that you have appointed new directors on a temporary basis because none of the owners are interested in the position. If no one squacks, you have a functioning board. If any owners bitch, that’s not a problem; appoint them to the board.
Don’t tell the lawyer
This may not be the ideal way of handling this problem but it is fast and cheap. If you do something like this, don’t tell the corporation’s lawyer or the accountant.
The lawyer will feak out and send you a letter stating that you are in violation of the Condo Act and your actions are illegal. The auditor may add this information in the Financial Statements. That paper trail could lead to lots of trouble later on. You shouldn’t ignore professional advice.
Sorry
There is an old management saying: It is easier to ask for forgivness than it is to ask for permission. If you say sorry, it would be extremely poor manners for anyone to refuse to accept your apology wouldn’t it?
Tongue in cheek?
Maybe.
Realtor Thomas Park on video openly bragging about how he used client proxy votes to rig a strata (condo) election in his favour
Reditt Vancouver
Realtor Thomas Park on video openly bragging about how he used client proxy votes to rig Firenze strata elections in his favour to maximize his profits on his multiple (probably illegal) AirBnBs.
Watch this short video. He explains how he collected over 100 proxies and not only did he defeat the motion to ban short-term rentals, he also voted the two directors, who were behind the motion, off the board.
Ontario woman says using 'cash for houses' company was costly mistake
CBC News (abridged)
Erica Johnson, Kimberly Ivany
23 October 2023
Laurie Thompson admits she needed to sell her townhouse in Smithville, Ont., fast.
Thompson had seen street signs and posters in her neighbourhood — companies offering to pay quick cash for houses. She'd even received what appeared to be a hand-written flyer in the mail, advertising a hassle-free cash sale — no renovating, open houses, or Realtor commissions.
She hit the internet and found a company with positive reviews and attractive promises called Honest Home Buyers Incorporated (HHBI), based in nearby Hamilton.
"The website said, 'Cash in your hand [quickly],'" said Thompson.
The website promised other advantages, too — "more cash" in a seller's pocket, a quick closing date, no Realtor fees and it claimed homeowners sometimes get a cheque "the very same day!"
How these people operate
Her contract was with HHBI, so Thompson figured Chow was the buyer.
"I thought I sold my house to him, right there," said Thompson. "Done deal."
But Chow didn't buy Thompson's house at all. He secured the option to sell it to someone else before the March 31 closing date — two and a half months later — at a potentially higher price.
It's called an "assignment" contract — the house can be sold to another buyer before the closing date. In Ontario, and across the country, all residential real estate contracts can be assigned to another buyer unless there's a clause explicitly stating that isn't allowed.
"The game here is very clear," said Rabidoux. "They're just going to re-market your house … try to sell it somewhere for higher."
Any profit made on the sale goes into the company's pocket, not the seller's — different from licensed real estate agents, who take a commission but leave any profit beyond that for the seller.
Thompson said the fact that the contract could be assigned to another buyer was news to her — there was no language explaining that was allowed.
Some contracts are weighted even more favourably for cash for houses companies, says Rabidoux. They contain a clause that lets the company back out of a deal completely, if no buyer makes an offer by the closing date.
"In most of the [cash for homes] contracts I've seen, there's a lot of wiggle room for the buyer to get out of that contract," said Rabidoux. "It's literally, 'Heads I win, tails I don't lose.' It's a zero-risk business model."
Change the contract
Thompson knew $575,000 was below market value, but says she figured it was worth the trade-off of getting cash fast, without the hassle of numerous open houses.
The next day, though, Chow cancelled the contract and renegotiated for $550,000.
Thompson balked but says she again felt pressured to sign.
Chow explained that Thompson would only be getting a deposit — $7,600 — not the full $550,000. The rest would come when the deal closed, said Chow.
Thompson says he promised that would happen quickly — less than a week, because he had an interested buyer. On the phone with Go Public, Chow admitted he'd claimed to have a buyer, but later said in an email no one "can prove" that.
The house went on MLS
He had her townhouse listed on MLS, sent in cleaners and a photographer, but Thompson says she thought that was just a formality, on the off-chance the purported buyer fell through.
Instead, agents booked dozens of showings – something Thompson thought a cash for homes deal would avoid.
In an email to Go Public, Chow says he explained the entire process "A-Z" to Thompson, and is unclear why she was confused.
Three weeks later, Chow flipped the house to new buyers, who paid $610,000 – $60,000 more than Thompson's contract, which he pocketed.
His wife is a real estate agent
Chow's spouse is Marie Tsai, who is named on HHBI's website as the company's office manager, treasurer and bookkeeper. Turns out, she is also a licensed real estate agent and listed Thompson's property — so made commission.
Thompson filed a complaint with RECO, which eventually penalized Tsai for failing to disclose she had a personal interest in the transaction. She was required to complete a course outlining an agent's obligations, at her own expense.
Problem plagued luxury Yorkville condo The One put into receivership
City News
Michael Talbot
19 October 2023
A luxury condo and retail development at Yonge and Bloor Streets that was billed to be the tallest of its kind in Canada has been placed in receivership after it was plagued by construction delays and cost overruns that left it $1.6 billion in debt.
Lenders forced the project into receivership after claiming the developers failed to make payments on those growing debts.
The One — an 85-storey hotel, condo and retail development by Sam Mizrahi and Jenny Coco — was supposed to be finished by December 2022 at a cost of $1.4 billion.
So far, concrete columns and walls have only been poured up to the 40th floor with a projected completion date of March 2025, according to court documents filed by lender KEB Hana Bank, a South Korea-based financial institution.
The project is also expected to run $600 million over budget, according to the documents.
Apple backed out
Apple Inc. was reportedly slated to open its flagship store on the main floor of The One’s retail space. But the court documents state: “The Project recently lost its anchor retail tenant, and no replacement anchor tenant has been secured.”
Alvarez and Marsal Canada Inc. has been appointed the receiver and manager and will have access to $315 million to continue construction, the court documents reveal.
Mizrahi Inc. will remain the general contractor on the project.
Mizrahi Developments provided the following statement to CityNews:
“At the request of the project’s senior lender, the court has appointed a receiver to overcome an ongoing governance issue that has caused significant project delays. As part of this arrangement, the receiver has requested that Sam Mizrahi and his company remain as the Developer and General Contractor to oversee completion of The One. Mr. Mizrahi maintains his equity position in the project.
This is a welcome decision that will allow for the successful completion of The One under the continued leadership of Sam Mizrahi and Mizrahi Developments.”
A FAQ on the Alvarez and Marsal Canada Inc. website attempts to sum up what went wrong with the project.
“Over the last few years, like many other large-scale construction projects, The One Project has faced various economic headwinds, including impacts from the COVID-19 pandemic, supply chain disruptions and unanticipated work stoppages, which, together with other factors have resulted in material cost overages and extended construction timelines.
“The principal purpose of the receivership proceedings is to create a stabilized environment to allow for the continued construction of The One Project, to obtain additional financing required for that ongoing construction, and to assess and implement the best means of maximizing the value of The One Project.”
Alvarez and Marsal Canada says previous sale agreements will be reviewed in the near future “in conjunction with a review of the fair market value of the applicable unit to determine what, if any, steps will be taken with respect to these agreements.”
As of August 31, 2023, 70 residential units at The One remain unsold.