Condo News

Scarborough Public Information Session
29 November 2012

Approximately 45 condominium owners attended the fifth Ministry of Consumer Services public information session at the Chinese Cultural Centre of Greater Toronto in Scarborough on Thursday, 29 November 2012.
One owner came from Collingwood, a couple from Peel Region and one from Kitchener.

The local Liberal MPP spoke briefly and then best stated that the consultation process would take 18 months, as the issue is very complex with high stakes. The ministry is looking for consensus.

Minister Margarett Best said that condo owners have told the ministry that their problems include:

1. Absentee owners (investors)
2. Unqualified directors
3. Owners refusing to be accountable
4. Mediation and arbitration does not work
5. No standards for reserve funds
6. Tarion does not include conversions
7. Property managers are not qualified.

Then the meeting was opened up to the floor. Fifteen owners spoke, one third of the audience. Some of the issues they raised included:

1.	Many owners are indifferent.
2.	There are suspicions that the property managers are taking kickbacks.
3.	The ministry does not know what percentage of condos inadequate reserve funds.
4.	Condos are the new supply of rental units.
5.	One board president was intimidated and feared for her personal safety because she tried to terminate the property management company.
6.	Some owners are going to lose their homes due to corruption.
7.	Board secrecy must end.
8.	The owners need a Bill of Rights.
9.	A board member said that at his condo, the suppliers pay bribes to the property managers and directors.
10.	The rights of the owners at the AGM elections are abused. The owners must print their names and sign the ballots at the AGM elections prior to putting them into the ballot box and then the board adjourns the meeting while they take the ballots away to count them in a private place and then announce the results when they return.
11.	Owners who are opposed to the board have their cars vandalized.

Minister Best took all of this in stride saying that the ministry has heard all of this before. None of the panel participants showed any sense of outrage after hearing any of the owner's experiences.

During her closing remarks, Margarett Best repeated that changes to the Act would take a lot of time because experts say that the Condominium Act is the most complex piece of legislation in Canada. [A few listeners thought that that was a strange thing to say as how could the condo act be anywhere as complex as Canada’s criminal code or our income tax legislation?]

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Trump Hotel buyers fail to get court to intervene in disputed purchases
Toronto Star
Susan Pigg
Friday 23 November 2012

Panicked buyers of hotel-condo units in Toronto’s Trump International Hotel & Tower were unable to convince a judge Friday that they need an emergency hearing — and an investigation by a court-appointed inspector — into financial dealings at the ill-fated project.

Five buyers who lined the back of the tiny courtroom, some on the verge of tears, were alarmed to hear that tens of thousands of dollars in deposits they have been trying to retrieve from developer Talon International Inc. “are gone,” according to their lawyer, Javad Heydary.

“It’s an absolute mess,” Heydary told a motions scheduling court, where he was seeking Friday to fast-track a hearing date for buyers who have alerted Talon they want to rescind their deals and get back deposits averaging more than $175,000.

“The facts of this case don’t give us the luxury of going through the regular court process,” Heydary argued. “There is a matter of public interest in this.”

Talon lawyer Mark Klaiman disputed the need for an emergency hearing. He also called allegations that deposit money is missing “spurious.”

He acknowledged that Talon has used the deposit money, as is allowed under the Condominium Act, but stressed that the funds are protected, as required, by an insurance policy.

“It’s just not that urgent,” Klaiman told Madam Justice Wailan Low. “Those deposits are secured by the insurance.”

“Those insurance policies could not be worth the paper they are written on,” Heydary responded, stressing the need for the court to act quickly to protect buyers in the troubled project, which is “highly unusual (with) none of the usual safeguards … other than the Trump name.”

The buyers in court Friday — Korean-Canadians who were sold on Talon’s projections of revenue that would flow from renting out the hotel rooms — have been trying to back out of deals citing “material change” — maintenance fees and taxes that are 30 to 50 per cent higher than expected.

Buyers say banks are unwilling to provide mortgages for the pricey hotel-condo units, which cost from $700,000 to more than $1 million, and secondary lenders are demanding 50 per cent down and high interest rates.

Talon has launched lawsuits against seven other buyers in Newmarket’s Ontario Court of Justice. It’s asking the court to reject the notion of material change and to stop buyers from rescinding deals penned years ago.

Heydary stressed the need for a hearing before Nov. 29 so buyers can at least get a better handle on the finances of the project at Bay and Adelaide Sts. and the status of the deposit money.

“I’m not satisfied of the urgency of this. The deposits are secured by an insurance policy,” said Justice Low.

She scheduled Aug. 2, 2013, as a hearing date — more than eight months after buyers are expected to hand over final payments.

Last week Heydary launched a lawsuit against Donald Trump, Talon and its principals, Val Levitan and billionaire Alex Shnaider, on behalf of four buyers who were in court Friday, alleging they were “victims of an investment scheme and conspiracy.”

With just days to go until deals are supposed to close, the lawsuit seeks to have the plaintiffs’ deals rescinded and their deposits returned. It’s also asking for damages of more than $2.7 million for each of the plaintiffs.

At least five more buyers are set to join the lawsuit, said Heydary. He’s also been contacted by representatives of 40-plus buyers, many from the U.K. and Europe.

All of them were shocked to find out last February, when Talon issued new financial estimates for the much-delayed project, that the hotel-condo units weren’t quite the Hollywood gold they were billed to be in slick marketing materials graced by Donald Trump’s smiling face.

In fact, the Ontario Securities Commission is now investigating whether Talon’s sales tactics amounted to marketing the units as investments, with rosy rental or cash flow forecasts, in direct violation of a ruling by the commission.

Talon says it “has complied with the terms of the (OSC) ruling.”

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Scarborough Condo Info Session
22 November 2012
A bulletin from the Ministry of Consumer Services:

Learn more about the Condominium Act review and share your views at Minister Best’s public information session taking place in Scarborough on Thursday, 29 November 2012.

The session will be held from 7:00 pm to 8:30 pm
at the Chinese Cultural Centre of Greater Toronto
5183 Sheppard Avenue East
In the ABCD room.
Doors open at 6:00 pm
Free parking on-site

The Chinese Cultural Centre is on Sheppard Avenue at Progress, one street east of Markham Road on the south side of the street.

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Harsh words in judgment
17 November 2012
In a recent judgment, Justice Whitten states that Fine & Deo LLP fees were “excessive”, its behavior was “irresponsible,” and that it took actions that added an “element of drama to what normally would be a mundane commercial matter.”

Quoting from the judgment Justice Whitten states:
[49] The fees of F&D beyond July 26,2010 are not capable of being considered "reasonable" as there is no description or breakdown time wise or detail wise as to what actually was done. If the firm seeks to hide behind its newfound zeal for "solicitor/client privilege", so be it, but there is no basis for assessing whether these services are reasonable or were for the purpose of collecting the common expense arrears.

[50] Basically what happened after July 26, 2010 appears to have been avoidance by F&D of an assessment, the basis for the actual action had evaporated. The costs claimed were not costs contemplated by s. 85 of the Act. The prolongation of a lien discharge which was mandated by s.85(7), was not justifiable. F&D were not only flogging a dead horse, they were acting as if it would go around the track.

[51] If F&D pursues collection of its fees against the condominium corporation, innocent unit holders will be penalized but not because of the former owners in this matter, but because of the irresponsible behaviour on the part of F&D. That is not the equity that Justices Lane and Doherty spoke
of being protected under the statue.

A lawyer has written a review of this judgment that is very informative and gives a link to a pdf file that you can download.

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Condo Owners: Rights/Challenges/Outlook
14 November 2012

On Monday night, Rosario Marchese MPP and MP Mike Sullivan held a Condo Owners: Rights/Challenges/Outlook meeting at the York Civil Centre on Eglinton Avenue West.

An audience of 70 condo owners attended this meeting with one man coming from Owen Sound to tell us his story of court battles and personal intimidation.

Mr. Marchese talked to on why the Condo Act has to be updated. Four times he introduced his proposed Act in the legislature, his latest attempt dies with the present prologue.

Marchese’s Bill proposed three important changes:
1. An inexpensive tribunal for condo owners to take their disputes.
2. Licence condominium property managers.
3. Reform the present Tarion warrant program.

The floor was then opened up to the audience and at least twenty speakers told us their problems. They included:

1.	The majority of owners don't their fees to go up so the board will not increase the fees. The property is deteriorating so a group of owners have hired a lawyer to help them force their board to improve building maintenance.
2.	One condo does not hold AGMs. There are no elections.
3.	The local police fraud squad does not have the resources to investigate fraud by condo management companies.
4.	A property manager was fired for corruption so the manager had the owners sign a requisition to remove the board so he can keep the contract. They used rigged proxies to defeat the board.
5.	At one condo there are far too people living in some of the units.
6.	In one condo, 90% of the units are used as businesses and not for single family residences.
7.	One condo has not seen an audited financial statement in the last five years and their board keeps lying to them.

The speakers spoke of intimidation and threats by the managers, boards and the corporation lawyers. Legal bills are too high for the owners to seek justice.

What can the owners do?
Write to the premier, the Ministry of Consumer Services and to their local MPP. A hand written letter makes the most impact while a typed and signed letter is also effective. E-mails also work.

Rosario Marchese will re-introduce his bill to the house once the legislature returns to Queens Park. This will be his fifth attempt to get the Act changed.

It is clear that we need the Act changed. An inexpensive tribunal is required by the owners and so far it looks like Rosario’s bill may be the only chance we have to get one.

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ACMO news
08 November 2012

Dear ACMO Members:
This is an exciting time, with ACMO being recognized by government as one of the key experts in review of the Condominium Act, with significant support for licensing and professionalism in condominium property management, and the launch of our advertising and awareness campaign.

The following are a list of publications which will showcase the first in a series of advertisements with "real" managers telling our story. Placements have been booked for Condo Life, Toronto Life, Ottawa Life, London City Life, and an ACMO video is already running on the TTC Digital Screens in GTA subway stations. This campaign acknowledges your requests to raise the profile of the importance of the work we all do. The province-wide campaign will be continuous over a number of months and the medium selected will vary by region for best outreach and impact. One element of the campaign is advertising support through online vehicles. Regrettably the first insertion with Toronto Life was published with a somewhat misleading subject line - this has been addressed with the publication - but as the old saying goes "there is no such thing as bad publicity"!

We will keep you informed as this campaign continues. In the meantime, look out for our ads and we will welcome your feedback.

Thank you for your support,

Dean McCabe, R.C.M., President
Heather Savoury, R.C.M., Chair, Communications Committee

These ads should be of interest to all condo owners. I will look for the ads in CondoLife, a free real estate advertising monthly that is distributed at many subway stations.

I don't read Toronto Life or watch the ads on the subway video displays so I will miss them. If anyone sees any of these ads in Toronto Life, or any other of the listed publications, please scan them and send the files to me at:
contact@condomadness.info

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ThatChannel Interview
07 November 2012
On this just released video on YouTube, Condominium Owners Association members Linda Pinizzotto, David Dayan and Merg Kong talk about the difficulties that condo owners in Ontario face and how the present legislation does not protect them.

Linda also describes the process the Ministry of Consumer Affairs is using to draft changes to the Condo Act.
44.53 minutes
https://www.youtube.com/watch?v=7m9jkpe_VYw

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'Condo queen' realtor has licence suspended
CBC News
Posted: Nov 6, 2012

An Ottawa realtor who calls herself the "condo queen" has had her real estate licence suspended after pleading guilty to obstructing an investigation.
Marnie Bennett has a radio commercial where she promotes herself as the condo queen.

Marnie Bennett pleaded guilty to six counts of attempting to obstruct a Real Estate Council of Ontario inspector during a 2011 investigation.

The inspector was checking to see if she was hiring unlicensed realtors to engage in real estate trades and whether she improperly paid other realtors without using a brokerage.

Brokerages are used to protect clients, the real estate council said.

"Payments have to go through a specific process and that's in order to protect consumers because there is deposit protection insurance if anything happens," said Sherri Haigh.

"We certainly have rules around how funds are paid and where they are stored. It's important for us that those rules are followed."

Bennett admitted to counselling an employee to make false statements and to providing misleading documentation.

Her licence has been suspended for four months and she will have to pay a fine of $200,000.

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Condos hit hard as market levels off
Susan Pigg
Toronto Star Business Reporter
05 November 2012

After almost a decade of almost unbridled demand and price growth, the GTA housing market is in slowdown mode and unlikely to show any marked recovery until the second half of 2013, according to a market outlook report from the Canada Housing and Mortgage Corp.

“I believe the slowdown we’re seeing has largely been caused by the tightening of financing rules and is a short-term shock which is basically going to take some people out of the market for a year,” until they can save up a bigger down payment, says veteran realtor and condo developer Brad Lamb.

“The single family home market is another thing. There’s not a lot of new supply coming there (unlike the GTA condo market where about 50,000 new units are under construction), so prices will continue to rise.”

Condo sales have nose-dived just since May, and now prices are starting to slip, at least in the city: The price of a Toronto condo traded via MLS averaged $358,741 in October, down 2 per cent over a year earlier, while sales were off 14 per cent, according to figures from TREB.

That compared to a 20 per cent decline in resale condo activity in the 905.

New condo sales have seen a much more dramatic downturn — about 30 per cent — as developers hold back on project launches and offer incentives to buy.

Lamb has three condo projects in the works right now but has abandoned plans for three others, just like other developers who are now taking a wait-and-see attitude.

A number of concerns now colour the condo market: A 30 to 40 per cent drop in interest by investors who’ve largely fuelled the Toronto condo boom since 2007; consumer frustration that new units are too small and too expensive at $600 or more per square foot; the rising inventory of unsold condos and fears over how many so-called “assignment” units could hit the softening market.

Those are units bought in the preconstruction phase by people who intend to flip — or “assign” — them to new buyers at a significant markup before having to pay final payments, including land transfer taxes.

Lamb has called that underground condo market (developer rules usually forbid listing assignments on the public MLS system) a “monster.” One downtown condo realtor estimates some 6,000 to 7,000 assignments could come on the market in next year or two.

The big unknown is if the owners are largely wealthy investors or average folks in over their head who will just walk away or dump discounted units into a slumping market.

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Information Session—London
02 November 2012

Learn more about the Condominium Act review and share your views at Minister Best’s public information session taking place in London on Wednesday 07 November 2012.

The session will be held:
7:00 p.m. to 8:30 pm
London Central Library
251 Dundas Street
Wolf Performance Hall
Doors open at 6 pm

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