West End Vancouver condo owners say they’ve been harassed to sell
The Globe and Mail
16 September 2016
A resident in
Vancouver’s West End walks down the street. The developer thirst for
property in the area, dominated by low-rise, multifamily buildings, is
so high that some residents say they are being harrassed to sell.
(Kerry Gold For the Globe and Mail)
Residents in the West End, many of them elderly, say that some
unscrupulous property investors are harassing them in an attempt to get
them to sell their strata condos.
are under tremendous pressure to sell
In some of Vancouver’s overheated residential areas, owners of strata
properties are under tremendous pressure to sell. One homeowners’ group
says that has led to bad behaviour by a small number of developers and
real estate companies to force strata owners out of their buildings.
Tony Gioventu, executive director for the Condominium Home Owners
Association of BC, has been advising condo owners who say they are
being harassed. He says the bullying tactics started around the time
the province made changes to the Strata Property Act with Bill 40,
removing the requirement that all owners agree to liquidate in order to
sell a building. Now, only 80 per cent of strata owners need to agree
in order to start the process. That legislative change has opened the
door to investors with underhanded tactics, he says. Elderly residents
living on low incomes are the easiest targets. One tactic, Mr. Gioventu
says, is to buy up units to obtain majority power and then try to use
them as rentals. They will suggest to the minority group of owners that
the new tenants may be difficult or even unsavoury.
everything from physical threats to verbal threats
“I’m hearing of everything from physical threats to verbal threats and
harassment to threats from lawyers, and third-party agents – all kinds
of aggression and attacks being targeted at the senior community and
remaining owners, trying to force them out at lower-than-reasonable
prices. This is the side of industry that is really appalling,” Mr.
Gioventu says, stressing this is not behaviour typical of the
development industry – it is something new.
“It’s a form of what they call ‘block busting,’” he says. “If you want
to redevelop a neighbourhood or buy into a building and take control,
just install drug-dealer tenants or whatever it takes to make
circumstances unlivable. I hate to say it, but there are unscrupulous
people out there.”
suggested that maintenance fees would have to triple
In one situation, an investor purchased most of the units in a larger
West End building. The investor, who now holds the majority of votes on
the condo board, suggested that maintenance fees would have to triple.
The majority of the building residents are seniors living on pensions
who won’t be able to afford higher fees.
The purchase offers, Mr. Gioventu says, are almost always lower than
market value. The minority owners showed Mr. Gioventu the offers they’d
received from the investor.
“They are about 30 per cent above assessed value, but really, that’s
about 30 per cent below market value. So it’s not really fair.
make their lives unbearable
“And he told them if they didn’t take it within 30 days, he would do everything he could to make their lives unbearable.”
For old strata-condo buildings, the pressure is on like never before.
Kirk Kuester, executive managing director at Colliers International,
says the older strata buildings have become a bigger focus for his firm.
“We have never been busier putting out proposals and meeting with
strata corporations and educating them on the process associated with
this Bill 40 legislation,” he says.
“There is an abundance of older wood-frame tired buildings not at their
highest and best use. And because of the economics of multifamily real
estate development in Vancouver, when condo values have moved as much
as they have over last couple of years, they are pulling land values up
with them all the time. It puts all of these buildings at risk.
“It depends what side of the fence you are sitting on. Some [strata owners] are licking their chops. Others don’t care.”
With the new strata legislation, he’s heard of investors taking over
just enough of the units to make it impossible for the other owners to
form an 80-per-cent majority.
“There are people that are quietly out and about in some of these prime
areas, and they are identifying prime buildings and trying to aggregate
21 per cent. So guess what? You and I live in a building and there are
100 suites. And we quietly watch 20 of our neighbours accept offers
from a mysterious buyer and it’s ultimately one buyer. One buyer now
has 21 per cent of the control. There is no more 80 per cent happening.
“They essentially freeze the strata.”
she fears for her safety
That tactic drove one group of strata residents into a panic to sell.
In the West End, a senior who lives alone said a small developer has
bought the majority of units in their small building and is pushing the
remaining seniors to get out. We are seated in her spacious, bright
apartment just off Robson, where, like many of her neighbours on the
street, she’s lived for three decades. The woman, in her 70s, didn’t
want to be identified because she fears for her safety. One agent
warned her that if she didn’t move, the majority owner could triple her
maintenance fees. He suggested that undesirable rental tenants could
soon move into the building. He also asked her how she’d feel living
next door to constant construction sounds, because the majority owner
of her building also owns several buildings on the block.
The woman says she has several agents calling her constantly. When she
refused to sell to one agent who’d called, he started yelling
expletives at her on the phone. In tears, she phoned police.
“There’s been a lot of harassment,” says the woman, who says she has
health problems. “I love my place. The building is in good condition.”
However, she now has to choose between a life of being bullied, which,
she says, is “incredibly stressful,” or moving out, so she can find
peace again. The problem is, there is nothing for her in the same
neighbourhood. Like her neighbours who’ve sold, she’d have to move out
of her community.
Another resident of the same building said the investor had divided the homeowners from the start.
“He made the first buyer and the second buyer all sign non-disclosure
agreements, because he didn’t want us talking to each other,” says the
woman, who says she’s too old to fight. “He’s smart. He took us down
one by one, broke up the group, and got us all paranoid and scared.
We’re pretty much living in fear.
“When it came down to the last five of us, I could tell everyone was
scared. And everyone was sort of panicking because they didn’t want to
be the last one out, because he could make our lives miserable.”
Lawyer Oscar Miklos is representing a group of strata residents that is
being harassed by a new investor in their building. He says strata
owners will always get a better deal if they stick together as a group.
“Sometimes, these people are very asset-rich but cash-poor … and they
don’t have the benefits of having a lawyer on their side. And
certainly, if that’s the case, then that does create a problem for them
because they are victimized or prone to this type of bullying tactic.
“The developers can team up, so to speak, with their own real estate
agents and the realtors can get involved as well – and depending on who
the realtor is, and how aggressive, sometimes they can be the assistant
to the developer and use these type of tactics.”
Mr. Miklos says strata owners facing unfair actions by a majority owner
can seek help through the new Civil Resolution Tribunal, where they can
represent themselves. It is like a small claims court for strata
property owners, but it will also handle block-busting tactics and
failure to follow strata bylaws, such as pushing for rentals when the
bylaw says none is allowed.
Tom Reinarz is a retired builder who’s lived in his West End house for
40 years. He took a break from painting his house – an “oasis,” as he
describes it – to talk about the changes. He has two tenants who’ve
been with him 17 years, but at other buildings, he’s seeing unfair rent
increases. Buildings along his street have been bought up in the past
few years. He says he’s “upset” at the inflow of money coming into the
city, with little regulatory controls.
“You feel like these are people who have no tie to the West End, no tie
to Vancouver … It’s just the way it’s done. It’s so disturbing.
“It’s changing already. You see different people, people who have more
money move in, and people that have less money – and they have to go to
Burnaby or wherever – further out. So the whole thing is completely out