‘I’ll never buy a condo again’: Apathy leads to condo in crisis
Toronto Star
By Jennifer Yang Staff Reporter
26 May 2011
Note: This article has been edited from a previous version.
Nothing seems to function as it should at 40 Panorama Court.
Not the concrete, which has been falling off balconies and threatening
to break loose in the underground garage. Not the elevators, which are
prone to breaking down and trapping residents inside. And certainly not
the roof anchors, which have been unable to support the weight of
window washers for three years now.
the most dysfunctional element is the community
But perhaps the most dysfunctional element is the community inside the
32-year-old building’s dirty windows. The relationship between
residents and building management is broken as well, with residents
making accusations of corruption, whisper campaigns circulating the
hallways and condo meetings so heated that the police have gotten
involved.
York Condominium Corporation 506, located near Finch and Kipling Aves.,
is in crisis. The 202-unit condo building needs millions of dollars in
urgent repairs — but at the same time, it has an operating deficit of
$670,000, a depleted reserve fund and a community that can’t agree on a
fix.
In August, a desperate board of directors took drastic action and
hauled the building’s unit owners to court.
“YCC 506 is in serious financial and physical condition,” the condo
corporation wrote in its court application. It continues: “The
situation has become so urgent that even a well intentioned board of
directors will be unable to take the immediate and drastic actions
necessary.”
The corporation asked a Superior Court judge to appoint an outside
administrator to seize control of 40 Panorama Court and whip its
finances into shape. Veteran property manager Joseph Vero was given six
months to perform the task.
On May 10, Justice George Strathy extended Vero’s term for another
year. The judge attributed the condo’s problems to successive boards of
directors who have depressed monthly fees while neglecting to make
necessary repairs, aided in part by the support or indifference of unit
owners.
the chickens came home to roost
“(They have been) postponing the inevitable day when the chickens came
home to roost,” Strathy wrote. “That day has come and gone.”
Appointing an administrator is a “serious remedy” reserved for the most
dysfunctional of condo corporations, said Armand Conant, a condo lawyer
and past president of the Canadian Condominium Institute.
“The Condominium Act and condominium governance is based on democracy,”
said Conant, who is a court-appointed administrator for two buildings
himself. “To take that away and put an arms-length person in — it’s
pretty draconian.”
Condos built in the 70s and 80s are showing their age. Conant estimates
about a dozen buildings in Ontario are currently in a similar state of
crisis, mostly in the GTA. Given that there are 9,000 condo
corporations in the province, some are bound to have dysfunctional
communities who have neglected to do the necessary housekeeping.
unit owners
are mostly to blame
According to the condo corporation at 40 Panorama Court, unit owners
are mostly to blame. The court filing states that owners have largely
blocked efforts to increase monthly fees, despite a growing backlog of
expensive but necessary repairs. There have been minimal or no
maintenance fee increases since 2004, the filing claims.
Condo board meetings have also been poorly attended in the past. Owners
are mostly apathetic towards the building’s affairs, said Gerard
Bisaillon in a court affidavit.
Others become board members expressly for the purpose of working to
keep condo costs low, he said.
“They think that every major repair or replacement of the common
elements is wasteful of their money,” said Bisaillon, an owner and
longtime board member. “Many do not see things outside their own unit.
They refuse to look at the big picture.”
46 unit
owners were in arrears
Some owners also fail to make payments on time. As of April 15, 46 unit
owners were in arrears of their monthly common expenses, some owing
several thousand dollars, according to property manager Loucas
Solomou’s affidavit.
But many owners at 40 Panorama Court blame the building’s management
for getting them into this financial mess.
“We’ve been here 11 years and that’s what they’ve done to us,” said
Jenipher Hazlett, who owns a two-bedroom condo on the first floor.
Like many in the building, Hazlett only learned the extent of her
condo’s financial woes when she received a notice that her board was
taking her and other owners to court.
Up until that point, all Hazlett knew was that she had been dutifully
paying her condo fees, in addition to periodic “special assessment
fees” for one-time projects, such as fixing the underground parking
garage.
In 2001, the building collected $2 million
In 2001, the building collected $2 million from owners in special
assessment fees to repair the crumbling underground garage. But today,
hazardous sections of the parking lot remain blocked off, forcing
residents to park on the lawn or fight over limited spaces in the
visitor lot.
“They have collected money from us in maintenance fees and assessment
fees every year,” said Roza Zarik, who owns a three-bedroom unit with
her husband. “Where did the money go? Why did we get to this point?”
Suspicions and hostilities in the building are deep-seated. Some
residents have accused property management and board members of
pocketing the money and receiving kickbacks.
owners have also used intimidation tactics
According to owner and building superintendent Visvalingam
Kanapathypillai’s affidavit, owners have also used intimidation tactics
to bully board members into keeping monthly fees in check.
“Individual unit owners with an agenda to keep common expenses low will
knock on your door . . . or corral you in the hallway,” he said. “It
can be very intimidating.”
Board members who attempt to increase fees or take necessary action
also face the threat of removal, Kanapathypillai said in his affidavit.
In 2009, the board discussed taking out a loan, which would require a
majority vote from unit owners.
one
board director began spreading rumours
According to Kanapathypillai, however, the idea went dead when one
board director began spreading rumours that a $1 million loan had been
approved without the owners’ knowledge, prompting residents to petition
for the board’s removal.
A meeting called to vote on the boards’ removal ended in shouting
matches, threats and one allegation of assault. At the end of the
night, police had to be called and have since become a regular presence
at condo meetings.
Zarik acknowledges her condo’s community is in disarray but she
understands why emotions are running high. Her monthly fees have now
reached $900 per month but at least she isn’t a newly-landed immigrant
or low-income parent, like many of the other residents. In his
affidavit, Bisaillon also wrote that each unit could be on the hook for
almost $20,000 before the condo’s finances are back in the clear.
Those who want out are also having trouble selling their units. Zarik
recently saw a three-bedroom unit in the building going for $110,000.
She bought hers in 2000 for $124,000.
Both Zarik and Hazlett admit they have failed to pay attention to their
building’s finances until this recent crisis. And now that they are, it
could be too little too late.
“I feel like even though I own my unit, and I bought a piece of the
building, I don’t really own it,” Zarik said. “I can’t leave it and I
can’t sell it — I have to see it to the end now.
“I will never buy a condominium again.”
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