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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