Picking up the pieces

A year after the Khan scandal came to light, thousands of condo owners in the GTA are still trying to pick up the pieces as this Toronto Star article explains.

Fraud forces condo owners to pay thousands
Toronto Star
03 September 2012
Raveena Aulakh Staff reporter

Hundreds of people across Toronto who own units in condo buildings allegedly defrauded of millions of dollars by a former property management company are now coughing up big bucks for special assessment fees.

“I have just been asked to pay $975 in special assessment fees . . . every owner has to pay,” said Avijit Barua, owner of a unit at 10 Markbrook Lane in Etobicoke, one of the affected condo corporations.

Lawyers estimated that the total misappropriation topped $20 million. (10 Markbook Lane is on the hook for about $4.5 million, said Barua.)

Several buildings filed civil suits against Channel and Khan, and Toronto police are investigating.

25 Grenville St., a luxury condo with about 200 units in downtown Toronto, alleged that Khan registered a fake bylaw without the board’s knowledge that authorized him to borrow more than $3 million against the property, according to court documents. That money was allegedly funneled into a separate bank account.

One resident said owners collectively had already been asked to pony up $300,000 in special assessment fees.

“It was a hardship,” said the resident, who did not want to be named. “We were told we probably will have another $100,000 assessment over the winter.”

The resident also said that some condo-owners were suing board members, “who they also feel should have been more diligent.”

In most cases, special assessment fees are to be used for the legal costs of suing.

Reverberations of the alleged fraud are being felt across the city. A board member at 236 Albion Rd., a highrise in north Etobicoke, said Khan is accused of leaving two outstanding loans totaling $5.5 million.

“We had a $1 million assessment in one year, from September 2010 to August 2011, said Golam Chowdhury, adding owners paid as much as $1,200 a month for maintenance during the special assessment. There were also several unpaid bills, he said.

“Our property value has depreciated by almost 50 per cent”

“Our property value has depreciated by almost 50 per cent,” he said. “It’s been a really tough time.”

A majority of the condos where Channel Property Management worked are owned by immigrants, who are still shaken up by what happened.

“We thought it (a condo unit) was a good investment,” said Maria R., who lives at 2121 Roche Ct. in south Mississauga. “It wasn’t.”

Condo fees have gone up about 25 per cent in the past year, she said.

It isn’t clear how an outstanding loan of $900,000 will be paid, she said. Channel was the property manager until August 2011, when the “loan” was discovered.

Meanwhile, Barua said it’s almost impossible to sell a condo in his building at 10 Markbrook Lane because “people know there are outstanding loans and legal troubles,” he said.

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