contents  references  previous   next

The Condominium Self-Management Guide
101 Reasons Not to Buy a Condo
Nathan's Company Meetings
The Condo Bible For Canadians
Never Buy a Condo
10 Secrets to Surviving Life in a Condominium
Condo Fees, Cash Calls and Condominiums
HOA Warrior: Battle Tactics for Fighting your HOA
Neighbors at War: The Creepy Case Against Your Homeowner Association
Condo Owner's Answer Book
Condo Board Election Revolt
Defend Your Condo & Homeowner Rights
Condo Saga
How to Recall Your Condo or HOA Board in Ten Precise Steps
Accounting, Auditing and Tax Guidelines for Ontario Condominium Corporations
Escaping Condo Jail
Buying into an HOA with your eyes wide open!
How to Recall Your HOA or Condo Board
Airbnb Hell: Travel Nightmares from Hosts & Guests... and how to avoid them!
The Chateau   A novel based on live in a Florida condo

Related to condo life
Unaccountable Accounting
Radical: A Portrait of Saul Alinsky
Rules for Radicals
The Best of Abbie Hoffman
Cheats at Work
Arbitration at a Glance
Private Eye magazine
Out of the Lion's Paw
You do not need a kindle device to read Kindle books. If you go to the Amazon website, you can download a free Kindle reader for your phone, PC or Apple computer.

The Condominium Self-Management Guide
2nd edition
By Marilyn G. Lincoln
ISBN 0-9683894-1-4

Marilyn Lincoln wrote this self-published guide to assist condominium board of directors decide if they should consider becoming a self-directed corporation and to assist the condominium boards who are presently self-directed.

Marilyn and her husband were superintendents at a townhouse condo complex for 15 years. They then bought their unit and helped setup the condominium as a self-managed corporation.

The guide’s 17 chapters are well organized and comprehensive covers everything from soup to nuts. The first chapter gives the board ideas on how to evaluate the performance of your existing property manager and the last discusses finding common ground between the board and the owners.

I would recommend this guide to all condominium owners in Ontario that want to understand what a condo corporation is and how it is suppose to work. For sure all board members should have access to a copy.

Marilyn makes it clear that there is a lot of work involved in running a self-managed corporation but if you have skilled and hard working board members, the owners can find it to be a very rewarding endeavor.

To order a copy of her guide send $39.95 plus $4.98 shipping and handling to:
The Condo Guide, 163 Thaler Ave. Suite #302,
Kitchener, Ontario  N2A 1R4


101 Reasons Not to Buy a Condo
by Tim Sutter
paperback:   $9.99
Kindle:        $5.06  at

Tim Sutter (a pen name) does not really have 101 reasons not to buy a condo because he repeats a few of the really important ones but he does have a very comprehensive list.

Better yet, he is a local boy who writes about the Toronto condo market.

For anybody who is thinking about purchasing a condo, this is a must read for general information and knowledge related to condo buying. Regardless of whether you are thinking about buying a condo, or are already living in one, this book serves as a valuable cautionary tale.

The author's work experience as a condo consultant/engineer has provided him with exposure to situations that most people are unlikely to go through.

It is not all negative as he does give fifteen reasons to buy a condo in a different Kindle book.
Nathan's Company Meetings
For Share Capital and Non-Share Capital Corporations
10th edition
Hartley R. Nathan
Publisher: CCH Canadian Limited; 9th edition
ISBN #:    9781554966684
Price:        $159.00 at  plus $16.00 S&H

Features a new chapter on condominium corporations.

Every condominium should have a copy to instruct the directors on how to conduct board and owner meetings.


The Condo Bible For Canadians
by Dan S. Barnabic
Paperback: 208 pages
Publisher: Neon-Publishing Corp (June 1 2013)
ISBN-10: 0986865109
ISBN-13: 978-0986865107
Price:  $15.12 from

This little yellow and black book is far thinner than I expected for a $20.00 book that claims to be a condo bible. A guide, sure but a bible should cover everything there is to know about condos and this book doesn't do that. It does, however, give condo buyers ten commandments.

The cover makes this book look like it is part of the popular “PCs for Dummies” series and the writing style fits in that mode so it would make a good bathroom or subway read.

Book's strengths
It is mainly a guide to anyone thinking of buying a condo. It should make potential buyers think twice—three times maybe—before buying, especially those who can barely afford the down payment and initial total monthly costs.

It also does a great job of informing potential buyers how risky condo ownership can be as condos are now more used as investment vehicles than primary homes.

The book warns buyers about the dangers of buying into a condo where low-income owners may lose their units if they lose their job or there is a drop in condo prices and his warning that a self-serving or dysfunctional board can create a lot of damage is dead on.

I disagree with a few of Mr. Barnabic’s points. They are:

Condos with over 25% rental units
I agree that a condo having more than 25% rental units is undesirable but it is difficult to find a Toronto condo tower that has less than 50% of the units being rented. What’s more, a buyer can’t trust the number of rental units stated in the status certificate as the managers either doesn’t know the true figure or they lie.

Want to know the real figures? Use the computer terminals at city hall and check the owners’ home addresses on the city’s tax assessment records. Their records are far, far from perfect but it will give you a good idea.

Information from residents & owners
Many condo residents don’t have a clue what is going on in the building let alone how many renters live in the building. Renters, who have no financial interest in the building, will be far more honest about a building’s defects than owners who hide their building’s dark secrets.

Condo towers have a limited lifespan
I think that a well-constructed condo tower can last indefinitely if the maintenance was kept up right from the beginning. Why not? Europe is full of 100-year-old buildings. How old is the Royal York Hotel?

Older condos will be terminated
I see no sign of this happening. The rundown and underfunded condo corporations manage to keep going. Sure they may look bad and they may have roaches, bedbugs and mice, the underground garages may be close to being condemned, the common areas are dirty and unkempt, the water pipes leak, vandalism is a headache and crime is a big problem but as long as the water runs and they have lights, they'll keep going.

Many low-income owners are trapped there. If they sell their apartment for $50,000 to $100,000 where can they buy anything better with the money they'll get? Some owners are slumlords who are making good money renting out overcrowded units.

Research the management company’s reputation
The author gives no hints on how a buyer can do this. Keep in mind that Channel (Manzoor Khan) was a proud ACMO 2000 accredited company so industry accreditation is no guarantee of ethical performance.

Some errors

Condos in Ontario cannot ban children. (page 63)
The quorum for owners meetings is 25% to hold the meeting and 50% plus one to remove a director or change a by-law. The stated quorum of 85% must refer to changing the declaration but that is seldom required. (page 69)
Reserve funds are for expected not unexpected major repairs and replacements. (page 73)
The reserves cannot be used for any purpose the condo corporation may choose. (page 74)
There is incorrect information about foreclosed units not being liable to pay condo fees. This is true in the United States but not in Ontario. (page 86)
In Ontario, all loans must be passed as a by-law by 50% plus one of all the owners. This is not made clear. (page 88)
Distressed condos being bought up by financial institutions who then force owners out and then pay them only a fraction of what the owners paid for their homes is a serious problem in some American states, especially Florida, but I have not heard of this happening here in Ontario. Maybe one day it will be a problem, if and when the condo market collapses, but it hasn’t happened yet. (page 91)

Reforming the condo system
Some of Mr. Barnabic's ideas are sound, such as government agencies educating condo buyers and adding far more information to the status certificates but others, such as holding an AGM every three months, demanding that buyers have a minimum down payment of 25% or forcing the buyers who have low down payments to pay an extra 25% in condo fees to go into a "rainy day fund" are impracticable. So is having a committee to monitor the directors' performance with the power to fire them.

 His reforms include these errors:
Professional projections. The corporation's peformance audit and first reserve fund study states all the construction problems that the engineering companies find. (page 171)
The quorum for a special owners meeting is 25%. It takes a vote of 50% plus one to remove directors not 85%.

Who should buy this book?
Anyone thinking of buying a condo, or a co-op, can learn a lot from this book. The main message is that buying a house is a far safer investment than buying a condo and that is something I strongly agree with.
Never Buy a Condo and Other Things I Have Learned from the Practice of Law
By Dick Blankenship
Kindle Edition sold through
Price: $5.00

A small book with eight chapters, just a pamphlet really. Yet it contains $5.00 of good advice for everyone, not just condo owners.

I particularly thought that these chapters were of value:

Chapter 2
People with no money have nothing to lose
Don’t hire the contractor who offers the lowest bid if there is any reason to think he may not be around long enough to finish the job or to honour the warranty period.

Chapter 3
Silence is Golden
Keep quiet when you get angry or upset. Your mouth can get you into a lot of trouble.

Chapter 5
Get it in Writing
A written agreement can save you a lot of grief.

Chapter 8
Never Buy a Condo
Not his best chapter but worth reading if you are thinking of buying a condo in Florida. Keep in mind that American laws covering condos are different than in Ontario.


10 Secrets to Surviving Life in a Condominium;
Live the Dream not the Nightmare
Bernie Winter
Kindle Edition

Price: 99 cents

This is a fictionalized account of new condo buyers who run into problems with their board on the day after they moved in.

I found this to be an interesting story, well written, very informative and it is offered at a give-a-way price.

The only thing I didn’t like was the advertising that is on some of the pages.


Condo Fees, Cash Calls and Condominiums
Pay Now or Pay Later
Lorraine Williamson and Bernie Winter
Kindle Book
Feb 2013
$2.99 CDN  (

This small booklet describes the reasons that condominiums have special assessments or loans. (In Alberta they call them “cash calls.”)

There is an excellent description on why condo fees are required and why condo fees that seems very low is not a sign that the board is doing a good job but that most likely maintenance and repairs are being ignored.

His booklet gives the warning signs that indicate when special assessments will be required.


HOA Warrior: Battle tactics for fighting your HOA, all the way to court if necessary
by Shelly Marshall
Kindle Edition—$5.07 CDN

A highly-recommended guide on the basics on fighting against an HOA or condo board.

First you need to decide whether the dispute is worth the time, money and stress that it will take especially when winning is not guaranteed.

Then you have to decide if you have the time, mental fortitude, enough support from the other owners and money to take on the battle.

Finally, you need to be sure that the new directors are not as bad, or worse, than the ones you got rid of.


Neighbors At War:
The Creepy Case Against Your Homeowners Association
by Ward Lucas
Paperback: 411 pages
Publisher: Hogback Publishing (October 20, 2012)
ISBN-10: 0985697806
ISBN-13: 978-0985697808

There are 310,000 Homeowners Associations in America. Sixty-two million homeowners have discovered, often to their dismay, that they now belong to an entirely different form of government, one they never expected.

Almost all new housing developments are inside these private compounds and in many places it's impossible to buy a house not governed by a private HOA board.

In effect, traditional government is now forcing homeowners into these
HOA compounds, and once inside, it's often impossible to leave with your finances intact.

An Emmy award winning investigative reporter, Ward Lucas examines this new housing system and has some startling revelations about how this changing landscape is impacting Americans.

Ward Lucas fought five major lawsuits against two adjacent Homeowner Associations, winning four out of five of the cases. It cost him millions.

This book is a history of his battles and much more.

Up to 25% of all Americans have given up many of their constitutional rights when they bought a home in an HOA or condominium. The courts see people who buy into condominiums of HOAs as having voluntarily joined a private corporation and therefore must follow their by-laws and rules. This puts ordinary people in great financial peril.

He tells us about the bigotry, stupidity and arrogance of many board members. Furthermore he describes the corruption and fraud that runs amuck through shared home ownership such as HOAs and condos.

Then there are the corporation lawyers who will do anything to win and see homeowner disputes as a cash cow to be exploited. Finally, there is the threat of liens that have snatched thousands of homes from association homeowners.

How to fight back? Well, you must pay your fines and penalties immediately to stop them from ballooning out of control. Then sell and get out.

If you decide to stay, pay your fines and then fight them in the court of public opinion. Seek publicity and use the Internet to expose what your HOA or condo board is doing to their owners.

Then lobby your politicians to get the laws changed.

In many ways, this book mirrors what this website says. Buying a home in a shared ownership corporation can be a very dangerous proposition.


Condo Owner's Answer Book: Practical Answers to More Than 125 Questions About Condominium Ownership
by Beth A. Grimm

For many, the first home they purchase is a condo. What seems like an apartment that you own, in fact comes with a lot more responsibilities than a single-family home as you and your neighbors are sharing walls, floors and other common areas.

The Condo Owner's Answer Book covers all of the common issues with condos and condominium ownership presented in easy-to-follow question and answer format. It addresses the unique and specific type of home ownership that comes with buying and owning a condo. It also covers your rights and responsibilities as a condo owner and as a member of a home owners association.

Beth A. Grimm is a California condo/HOA lawyer.

Condo Board Election Revolt
How Florida’s First Condo Ombudsman Became the 500-Pound Gorilla
Valmore R. Lucier
Published by: Dr. Joyce Starr
ISBN 978–0–9792333–9–5

When Florida appointed America’s first Condominium Ombudsman one task he had was to appoint election monitors to conduct board of director elections. Preventing election misconduct and manipulation was seen as a priority. The author was Florida’s first Volunteer Chief Election Monitor.

In 2004 condo owners in Florida gained the right to petition for the removal of board directors. The incumbent boards lost 50% of these elections. As the owners found out how much money was being saved by kicking out the incumbents, more condos started signing petitions.

The author points out that most condo board members do not have a clue on what their responsibilities are. However board elections are often manipulated by board presidents, property managers and lawyers who do know what they are doing and who do not want to lose cash-cow accounts.

He also states that most condo owners do not know how board elections are suppose to be run so that the elections are fair and reflect their true desires. This ignorance gives the incumbents and their condo lawyer the ability to manipulate the process.

The author listed 50 different ways elections were tampered with including letting renters and deceased owners vote, changing the location or date of the meetings and using dated owner lists.

Although this book deals with a very important issue, it is of only some help for anyone looking for guidance in running condo elections in Ontario. The rules followed in the United States are far different than in Canada and the useful information that this book contains would have been better published as an essay or pamphlet.

However it should be mandatory reading for the bureaucrats, lawyers and politicians that will be re-writing Ontario's Condominium Act.

Defend Your Condo & Homeowner Rights
What You Must Do When the Board Turns Your Life
Upside Down
By: Dr. Joyce Starr
Dr. Joyce Starr Publishing
ISBN13 978–0–9792333–7–1

Dr. Joyce Starr was a member of her condominium board and a long time owner in her Florida condo corporation. It was a pet-free condo but that rule had been ignored from the beginning.

Every was going well and Joyce enjoyed living in her unit. Then one day she found a serious mould problem in the common hallways in her building. When she brought it to the attention of her board president, the stonewalling began.

For the next year and a half Joyce would not stop lobbying to get the mould fixed. When it was plain that her board was not going to do anything, she brought in a health inspector and contacted the local police, her local state representative and the state condo ombudsman. She then testified before the Governor’s Advisory Council on Condominiums questioning the accountability and practices of her condo board.

The board fought back—hard. They sent her a letter stating that she had to get rid of her cat. A letter from the condo’s lawyer followed. That started a bitter and expensive two-year legal battle over the fate of one cat.

Who are the villains in this story? Entrenched and combative condo boards and their lawyers who are eager to generate billable hours and who have strong political clout to prevent meaningful changes to protect owners in the condo legislation.

This small but very well written book describes unbelievable incidences of board mismanagement and the use of the legal system to wreak the lives of homeowners who run afoul of their boards.

If you think that arbitration is a cheap alternative to going to civil court, this book will open your eyes. Arbitration is a very expensive, time consuming and hazardous process. Joyce estimates that an owner could spend up to $150,000 in legal and paralegal fees.

This book gives a very good idea of what you need to do once you receive your first warning letter from the board. Joyce gives excellent advice on how to limit your liability and on how to defend yourself.

I highly recommend this book to all condo owners especially those who may fall afoul of their board. If you know anyone who is thinking of buying a condo, make sure they read this book first.

This book is available in print and can be purchased from the author’s website.
The Homeowners Defense Kit contains three books:
1. Defend Your Condo & Homeowner Rights
2. Condo Board Revolt
3. How to Create Home Owner & Condo Documents

This package of three .pdf books can be downloaded for $30US and you can pay by credit card. Within a couple of minutes, you can download your books and start reading.

Print versions of three books are available at slightly higher prices plus shipping charges.

Condo Saga
Exposing the Frailties in the Canadian Condominium Industry
By: Alfred. Cercama
Keystone Communications  2012
ISBN 978–0–9682786-4-2

In this self-published book, Alfred Cercama tells the story of being a first-time home buyer who bought a condominium apartment in the first building his real estate salesman showed him.

He loved his large apartment and his spectacular view of the Toronto skyline. After living in his new home for a year, Alfred realized the condo was suffering from serious financial and leadership difficulties.

What follows is the story of how Mr. Maverick and Alfred organized the owners and gained full control of the board of directors.

Condo Saga tells the reader how they organized and communicated with the owners and how the existing board, the property manager and the condo lawyer worked hard to discredit the owners who were trying to gain control of the corporation.

Alfred also describes the secret world of corruption that plagues the condominium industry.

Finally, after being on the board for almost two years, Alfred believed that his work was complete and so he resigned as president. With three board positions open, the three new board members seized control of the board and undone some of the good work that Mr. Maverick and Alfred accomplished.

As of this review being written, the new board has not released audited or even unaudited financial statements for the last two fiscal years.

I would have liked Alfred to have written more about the financial difficulties his board faced and how they dealt with them. I also would have liked to have heard the difficulties the three different condo corporations had running their shared facilities.
How to Recall Your Condo or HOA Board in Ten Precise Steps
Dr. David Goldenberg
Kindle Book
Starr Publishing (May 19 2012)
$5.93 from

This electronic "book" is actually a pamphlet. It also uses Florida state laws which are different than Ontario's. That is two strikes against this "book".

Yet what does six bucks buy you these days? A Whopper? Feed your mind instead of your stomach and help change the world; one condo at a time.

For anyone who knows nothing about how to organize a requisition meeting, this booklet has some sound ideas which makes it worth buying and studying.

This little booklet, along with the advice of an experienced condo lawyer, should help you bring justice to your condo corporation.


Accounting, Auditing and Tax Guidelines for Ontario Condominium Corporations
Chartered Professional Accountants Ontario
13 October 2013

Accounting, Auditing and Tax Guidelines for Ontario Condominium Corporations October 2013 is a publication that updates an earlier Guidelines issued by the Institute in 2008. (It was first published in April 1982.)

They reflect the Condominium Act, 1998, Part III - Canadian accounting standards for not-for-profit organizations of the CPA Canada Handbook - Accounting and Canadian Auditing Standards (CAS) of the CPA Canada Handbook – Assurance, all as of October, 2013.

This 48 page accounting and auditing guide for Ontario Condominium Corporations, (available as a download in a pdf format), although designed to assist accountants, is an excellent guide for condo directors, officers and owners.


Escaping Condo Jail
Sara E. Benson (Author), Don DeBat (Author)
$18.00 CDN [Kindle Edition]


Buying into an HOA with your eyes wide open!
Jill Schweitzer

This self-published guide to buying an American HOA makes some very good points and is especially of interest to anyone buying a condo or HOA in the United States.

Although much of the material does not apply to Canadian condo corporations, there is some material I found to be very relevant.

I especially liked these points:

The condition of the community is your first sign of potential issues with mismanagement, and the possibility of a special assessment.

Too often people join the Board with their own stop any special assessments, to even small things like being able to dictate how the landscaping is done around their unit. They like the power to control owners, good luck if they don't like you

You become business partners in a non-profit corporation with all of your neighbors. And you become the guarantor on all debts, loans, lawsuits,
liabilities, settlements, construction defects and disaster rebuilds. Or anything else the board deems necessary to assess you for.

If you have problems in your HOA, here are some options:
– Sue
– Suffer
– Sell


The most important part of this booklet is at the very beginning where it asks if starting a campaign to recall your condo board is worth the time, effort and grief it will cause you.

Once you decide that you will go ahead anyway, this book will disappoint an Ontario condo owner as it focuses mainly on Florida laws and therefore has limited value for a Canadian condo owner looking for practical advice.


Airbnb Hell: Travel Nightmares from Hosts & Guests... and how to avoid them!

by Turner Wright and Dan Weber
63 pages

Amazon pricing
United States
Kindle: $4.99
paper:   $6.99

Kindle:  $ 6.68


The Chateau
by Paul Goldberg
Hardcover: 384 pages
Publisher: Picador  (13 February 2018)
Language: English
ISBN-10: 1250116090
ISBN-13: 978-1250116093

Set during the week before Trump’s inauguration, Goldberg’s novel unfolds within the Château Sedan Neuve, a crumbling high-rise condominium in Hollywood, Florida. Governed by a corrupt board—rigging bids with contractors doing shoddy work while longtime residents get evicted—it’s a metaphor for America itself."
―Mike Fischer, Milwaukee Journal-Sentinel
Kindle edition
$ 26.67

Unaccountable Accounting
Abraham J. Briloff
Harper & Row  1972
ISBN 06-010471-6

Abraham Briloff (professor emeritus of CUNY Baruch), who for years wrote a column for Barron's, is a noted critic of the accounting profession. He constantly analyzed breaches of ethics and audit professionalism among CPA firms. This is his most influential book.

The majority of people assume that auditors pursue their tasks diligently and have ferreted out all the aberrations from a corporation’s financial statements with their gimlet eyes and red pencils. This is not so.

The author describes a number of accounting scandals carried out by major American corporations that the auditors deemed “fair under GAAP” guidelines but where the courts and the public saw the outside auditors giving undeserved legitimacy to dishonest financial statements.

Professor Briloff explains the game. Management takes the initiative in looking for flexibility (or “creative accounting”) under existing accounting rules. The outside auditors go along with the corporation’s management or they lose the contract.

The most serious aberrations in financial statements that resulted in major scandals were deemed by the auditors to be “fair” in accordance with generally accepted accounting principles (GAAP). That is not the same as “fair” as the word is used in normal society.

We get introduced to why 2+2 doesn’t always = 4, massaged earnings, incest trusts, game plans, comfort letters, earnings inflators, dirty pooling and big-bath accounting.

So what does all of this have to do with condos? Lots. It convinced me that if a condo board wants to minimize the bad news in their annual financial statements they can hire an accountant who will write a report that will make it difficult for the owners to understand the extent of the problems in the financial statements.

This book, which may not yet been equaled in describing the failings of the accounting profession, makes it clear that condo owners have to insure that they elect honest and ethical board members to run their corporation as outside auditors make poor whistleblowers.


Radical: A Portrait of Saul Alinsky
Nicholas Von Hoffman
Nation Books  2010
ISBN 978-1-56858-439-3

For ten years, Nicholas Hoffman worked for Saul Alinsky as a community organizer in Chicago. After Nicholas left Alinsky’s organization to become a newspaper reporter, they remained friends until Saul’s death.

Hoffman writes about Alinsky’s views on community organization; the nourishing of democracy at the neighbourhood level. At the core, there are several basic principles that can be used to organize condominium owners:
Start with what you have. Build from there.
People are moved to action by self-interest. Let them know what’s in it for them.
It is going to be a lot of work and it will take time.
The owners will have to do it themselves.
You will not always succeed.
Few community organizations last forever. Don’t make it a one-man band. You must train and encourage successors.
Don’t get sidetracked by fighting the board about one owner’s personal issue, something the other 200-odd owners don’t care about.
If a tactic doesn’t work, stop using it.

Community organization is a frustrating and difficult undertaking so it is easy to get discouraged. However, it is not always futile. Barack Obama used his community organizing experience to propel himself into the White House.

Rules for Radicals
Saul Alinsky
Paperback: 224 pages
Publisher: Vintage Books
ISBN-10: 0679721134
ISBN-13: 978-0679721130

An excellent paperback handbook on community organizing.


The Best of Abbie Hoffman
Four Walls Eight Windows  1989
Edited by Daniel Simon with the author
ISBN 0-941423-27-1

Abbie Hoffman was a life-long radical and a civil rights, anti-Vietnam war organizer. He was a member of the Chicago Seven (originally known as the Chicago Eight), which included fellow Yippie Jerry Rubin, David Dellinger, Rennie Davis, John Froines, Lee Weiner, future California state senator Tom Hayden and Black Panther Party co-founder Bobby Seale.

Later, Hoffman became a wanted fugitive for six years. He went into hiding ending up in Fineview, New York near Thousand Island Park under the name "Barry Freed". There he helped coordinate a successful environmental campaign to preserve the Saint Lawrence River (Save the River organization).

This book is divided into four parts. The first three parts are excerpts from three books that were written from 1968 to 1971. The final part is called New Writings and were written from 1981 to 1988.

I strongly urge anyone trying to organize condo owners to study Part 4, the New Writings. Abbie was a brilliant organizer and these essays explain what is necessary to educate and organize the residents in a condo community.

Cheats at Work
Gerald Mars
Unwin Paperbacks 1982, 1984
ISBN 0-04-301166-7

It is commonly believed that honest contractors will drive the cheats out of business. Dr. Gerald Mars, an anthropologist studied cheating in the workplace and discovered that the crooks drive the honest contractors out of business because they convince the clients that they are giving them a great deal.

Discounts on the work provided are made up for by unnecessary repairs, installing used parts instead of new ones or charging for expensive parts that were never replaced.

These are just a few of the tricks used to make the uninformed customer believe they are getting a bargain.

Arbitration at a Glance
Chris Trower
Labour Research Institute  1974

This out-of-print hardcover book is an excellent source for anyone wanting to understand the arbitration process.

Chris, a former Staff Representative with the Steelworkers Union, wrote this  book as a training manual for  union officials to help them prepare and present disputes in front of an arbitrator. (I was fortunate to have taken a training course on arbitration that Chris presented at a union training centre in Port Elgin, Ontario.)

Although Chris focuses on labour  disputes, his book is the perfect primer for anyone taking a dispute to mediation or arbitration.

A copy can be found on-line from a number of used book stores.

Private Eye magazine
British news, investigative journalism, satire and gossip magazine

The "Eye" is a British bi-weekly that exposes corruption, hypocrisy, fraud and dishonesty in all the major sectors of British society. It may be best described by a letter sent in by a reader.

I took out a year's subscription last year because I think your magazine is just about the best there is to read on the market today.

However, after a year of reading about unremitting, blatant stealing, double dealing, lies, etc in local and national government and companies and banks and and and... I just can't stand it any longer so I'm having to do an ostrich and bury my head and pretend it is not happening.

To this end and to my eternal sadness and shame I'm not going to renew my subscription and will in future just buy the odd issue now and again because I think it's all I can stand of the dishonesty in high places.
Yours in shame,

Trevor Smith

The Notorious Career of Al Dunlap in the Era of Profit-at-Any-Price
John A. Byrne.
HarperCollins Canada
ISBN-10: 0066619815
ISBN-13: 978-0066619811

“He is the logical extreme of an executive who has no values, no honor, no loyalty, and no ethics. And yet he was held up as a corporate god in our culture. It greatly bothered me.
—David M. Friedson, CEO of Windmere-Durable Holdings Inc.

Written by a Business Week Senior Writer. Chainsaw tells the story of blind greed and how Al Dunlap used his manager’s position to destroy and bankrupted Sunbeam in order to satisfy his lust for money.

Dunlap perfected his management style at Scott Paper where Dunlap and his assistant Russell A. Kersh, greatly assisted by outside auditors Arthur Anderson, were able to artificially boast the stock price by slashed costs, laying off thousands of employees and used accounting tricks to boast profit margins.

For his plan to work, Dunlap had to flip Scott Paper quickly before the charade was exposed. Lucky for him Kimberly-Clark bought the company in 1995 and Al and Russell Kersh walked away with millions made from stock options.

Al Dunlap promoting his book
"Mean Business".

Sunbeam hired Al Dunlap as its CEO in July 1996. As a condition of employment, Al Dunlap was allowed to stack the Board of Directors with close friends and admirers; people who he could control.

“If you want a friend, get a dog.
I’m not taking any chances; I’ve got two dogs.”
—Al Dunlap

Chainsaw belittled and then fired most of the Sunbeam executives, brought in Russell A. Kersh to be the Chief Financial Officer and a few other executives who worked with him at Scott paper and hired Arthur Anderson as the outside auditors. He proceeded to shutdown or sell two-thirds of Sunbeam's 18 plants and eliminated of half its 12,000 employees.

His methods resulted in Sunbeam's reporting record earnings of $189 million in 1997. However, he was unable to find a buyer by 1998. Dunlap then decided to buy controlling interest in camping gear maker Coleman, coffee machine maker Signature Brands (best known for making Mr. Coffee) and smoke detector maker First Alert. Within two days, Sunbeam's stock jumped to an all-time high of $52 per share in March 1998.
Not everyone was fooled
Andrew Shore, an analyst with PaineWebber Inc. followed Sunbeam stock. After meeting Dunlap in mid-1996, Shore immediately put out a buy on the stock. ''I didn't necessarily like him or trust him,'' he recalls, ''but I thought my clients could make money on him. I knew they just had to get out at the right time.''

After the company reported its results in the second quarter of 1997, Shore says he began ''getting pangs in my stomach.'' The numbers showed that Dunlap was building what Shore considered abnormally high inventory levels and accounts receivable.

Bill and Hold
Sunbeam was billing customers for products they had no immediate need and holding them in third-party warehouses. Shore picked up on it but said nothing. “No one [had] soured on him yet. Very few picked it up, only the smart shorts at the hedge funds” Shore said later. I thought it would take several more quarters to play out.''

He was right. Sunbeam's shares kept climbing, even though the company's third-quarter results created even greater cause for concern. Shore noted in one of his reports that there were massive increases in sales of electric blankets, usually a fourth-quarter phenomenon. Then, in the fourth quarter of 1997, he was alarmed by enormous increases in sales of grills, at a time when virtually no one buys those products. Still, Shore says, ''I didn't think the story was over just yet. The market hadn't caught it.''

By booking these sales before the goods were delivered, Dunlap helped boost Sunbeam's revenues by 18% in 1997 alone. In effect, he was shifting sales from future quarters to current ones. The approach was not illegal, but the extraordinary volume made it unusual.

Sunbeam's auditors, Arthur Andersen & Co., later insisted it met accounting standards.

Finally, Shore advised his clients to get out of the stock. He frantically downgraded the stock on Apr. 3 at 9:00 a.m., and it quickly fell by 4 points. Some two hours later, Sunbeam disclosed that it would post a first-quarter loss. By day's end, the stock fell 25%, to 34 3/8, and shareholders soon filed lawsuits charging deception.

The board wakes up
"Look, as much as possible, we tried to do things in accordance with GAAP, (generally accepted accounting principles), but everything has been pushed to the limit."
Robert J. Gluck—Sunbeam controller

The board of directors tried to find out what was going on. Russell A. Kersh, CFO, and Controller Robert J. Gluck led the board through the charges by the financial analysts, denying virtually all of them. The Arthur Andersen partner assured the board that the company's 1997 numbers were in compliance with accounting standards and firmly stood by the firm's audit of Sunbeam's books

The board was not fooled. On June 13, 1998 the board fired Al Dunlap. Three days later, Kersh was fired as well.

Reaction to Dunlap’s firing
Dunlap's ouster elicited unrestrained glee from many quarters. Former employees who had been victims of his legendary chainsaw nearly danced in the streets of Coshatta, La., where Dunlap shut a plant. Other chief executives, many of whom considered him an extremist, agreed that Dunlap's demise was a welcome relief.

Even members of his own family--long estranged from the man--seemed ebullient. Upon hearing the news of his father's sacking on television, Troy Dunlap chortled. ''I laughed like hell,'' says Dunlap's 35-year-old son and only child. ''I'm glad he fell on his ass. I told him Sunbeam would be his Dunkirk.'' Dunlap's sister, Denise, his only sibling, heard the news from a friend in New Jersey. Her only thought: ''He got exactly what he deserved.''

Lessons to be learnt
Feeding his personal greed, Al Dunlap drove Sunbeam into bankruptcy. Thousands of employees lost their jobs, towns lost their main employer and the stockholders left holding the bag lost their shirts.

The story in Chainsaw makes it clear the board must closely monitor management's actions. It also shows that the board and the owners may not be able to rely on getting clear and straightforward reports from the outside auditors.

“In all my years of reporting, I had never come across an executive as manipulative, ruthless, and destructive as Al Dunlap. Until the Securities and Exchange Commission barred him from ever serving as an officer of a public corporation, Dunlap sucked the very life and soul out of companies and people. He stole dignity, purpose, and sense out of organizations and replaced those ideals with fear and intimidation.
—John A. Byrne—editor Fast Company

In 2001, the Securities and Exchange Commission sued Dunlap, alleging that he had engineered a massive accounting fraud. Also named in the suit were four other former Sunbeam executives and the lead partner for Sunbeam's account with Arthur Andersen LLP.

An SEC investigation revealed that Dunlap and others had created the impression of a greater loss in 1996 in order to make it look like the company had experienced a dramatic turnaround in 1997. By the SEC's estimate, at least $60 million of Sunbeam's 1997 earnings were fraudulent.

He also offered incentives for retailers to accept products that would have otherwise been sold later in the year, a practice known as "channel stuffing". The SEC also argued that the purchases of Coleman, Signature and First Alert were made to conceal Sunbeam's growing problems. Dunlap's actions forced Sunbeam into bankruptcy.

Dunlap was also suspected of irregularities at Scott Paper. Not long after the shareholder settlement, he agreed to pay $500,000 to settle the SEC's charges. He was also banned from serving as an officer or director of any public company.

Not long after the SEC sued Dunlap, The New York Times reported that he'd engineered a massive accounting fraud at Nitec, a paper-mill company in Niagara Falls, New York.

He'd been the company's president from 1974 to 1976, when he was fired due to his abrasive management style.

“Boards should be absolutely certain that the company is run properly from a fiduciary standpoint in every degree. I am a great believer in the audit committee having full access to the auditors in every way, shape and form.”
—Al Dunlap

An audit by Arthur Young (now part of Ernst & Young) revealed numerous irregularities, including inflated inventory and nonexistent sales—circumstances similar to the Sunbeam case. The final result was that Nitec's $5 million profit for 1976 was actually a $5.5 million loss.

Nitec sued Dunlap for fraud, but was ultimately forced out of business.

Arthur Andersen LLP
Based in Chicago, Arthur Andersen was once one of the "Big Five" accounting firms among PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG, providing auditing, tax, and consulting services to large corporations.

In 2002, the firm voluntarily surrendered its licenses to practice as Certified Public Accountants in the United States after being found guilty of criminal charges relating to the firm's handling of the auditing of Enron, an energy corporation based in Texas, which had filed for bankruptcy in 2001 and later failed.

In praise of greed
"The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind."
—Gordon Gekko—Wall Street

Chainsaw is a book that should be studied by theology students as it makes clear that corporate ethics and society's ethics are different.

Uncontrolled greed
Business executives like Al Dunlap preach that shareholder value must be the primary goal for corporate executives. What that means is far different than what you and I think that should mean.

Al was not thinking about small shareholders when he preached this, or even the huge industrial or financial shareholders; he cared as little for them as the small-fry. No when he talked about increasing shareholder value he was talking about making the company's executives, him most of all, rich by their being given free stock options.

When Dunlap used accounting tricks and slash and burn tactics to push the stock up in the short term, he was making himself and his cronies rich. After all, they would know when to sell before the crash came, and the crash was sure to come.

Auditing— a disgraced profession
Dunlap could not have lasted as long as he did at Sunbeam if the company's internal accountants didn't go along with his accounting tricks and falsehoods. In this they were helped by the outside auditors from Arthur Anderson.

Chainsaw is just one more example that shows that outside auditors often fail to protect shareholders and have a long history of covering up accounting irregularities in order to earn huge fees.

Another vulture
Andrew Shore is no hero. He knew what Dunlap was up to but instead of sounding the alarm, he helped Dunlap by encouraging his clients to buy Sunbeam stock. They were the only constituents he cared about and he would look out for their interests, and only their interests—as long as they remained his clients and he was making money off of them.

That Dunlap was laying off thousands of employees, closing factories and laying waste to a couple of small American towns was of no concern to Andrew Shore. He also did not worry about the thousands of small-time investors who were getting sucked into buying a stock that was sure to crash.

He was like a witness to a rape who did not call 911.

Yet, Andrew Shore delivered value to his clients. He got them out when the stock was close to its peak so their profits were safe. All others—well sheep get slaughtered, don't they.


Out of the Lion's Paw
Ireland wins Her Freedom
Constantine Fitzgibbon
Macdonald & Co (Publishers) Ltd
London  1969

The Anglo-Irish War, which lasted for two years starting in the summer of 1919, resulted in Ireland, England's first overseas colony, achieving its independence. This amazing victory, won in such a short time with so few resources, was studied by  the rest of the colonial world and its lessons lead to victories throughout the 20th century from Algeria and Cyprus to China and Vietnam.

Micheal Collins was the architect of the Irish victory and his achievements were won, not in battle, but in in a silent intelligence war fought between him and and British Intelligence based in Dublin Castle.

Collins knew everything that the British were up to. Irish postal workers in London read the government's mail and Irish operators tapped their telephones. Collins had high-level informers working within Dublin Castle and he successfully prevented the British from knowing what was going on in Ireland.

Irish seamen acted as couriers between Britain, Ireland and their American supporters and Collins assassins murdered their British opponents while the British stupidly engaged in mass punishmnet among the civilians.

The British administration in Ireland became paralyzed so Irish victory was certain. This was the beginning of the collapse of the mighty British Empire, the mightiest the world has ever seen.

The lesson for disgruntled condo owners? If you don't know what the board and the property management is up to, you will have trouble replacing them.

Make friends with the security guards, cleaners and, if possible, the superintendent. They know a lot that is going on and their assistance can in invaluable.