An administrator is appointed 
“Channel is viewed by most homeowners with contempt and at best as ‘the mediocre value for the money.”
—MTCC # 710 Social Committee

Selecting an administrator
A meeting was held on 12 April 2010, between two corporation’s lawyers, two board members and three members of the Social Committee to decide on who would be selected to be the corporation’s administrator.

The corporation’s lawyers nominated Harold Cipin. The Social Committee wanted Mr. Armand Conant, as he was a lawyer and engineer so he could better determine if the millions raised by the loans was well spent.

Mr. Mario Deo was concerned about Mr. Conant’s $350 per hour fee. The corporation thought that a property manager like Mr. Cipin ($125 an hour) would be the most practical choice.

During the 25 May 2010 court proceedings the Board now seemed to favour Mr. Armand Conant as the preferred candidate switching from Mr. Harold Cipin as the corporation's candidate. In the closing of these same proceedings, Mr. Jonathan Fine of Fine and Deo then recommended another candidate, Mr. James Bezemer for the same position, whose hourly rate was $100 an hour plus expenses.

Meanwhile, the Social Committee interviewed three candidates and selected Andrew Wallace ($150 hour). They felt that Mr. Wallace’s candour and personality was an important factor in dealing with the problems in the building where home owners have lost faith in the practices and general lack interest or involvement of past boards and property managers.

The Social Committee also wanted an administrator who was not beholden to the board, Channel or the corporation's lawyers. Finally, Mr. Wallace was eager to investigate the corporation's finances to try to recover any mismanaged monies.

The judge selected the cheaper of the two; James Bezemer was appointed.

On the job
Jim Bezemer retained both Fine and Deo and Channel Property Management. The Social Committee were appalled. Instead he focused on the obvious; finances and property maintenance.

Financial status
On 10 June 2010, Mr. Bezemer took control of the corporation’s bank accounts. This is what he found:

Income
Operating funds	6,496.68
Reserve Funds	1,167.66
Accounts receivable	28,258.94
Debts
Accounts payable	471,062.89
Mortgages & loans	$4,500,000.00

The repayment of the loans and mortgages took 40% of the common
element fees.

Enbridge Gas was owed $140,000 and the unpaid bill was costing the corporation $2,300 a month in accumulating interest and charges.

The corporation's law firm was billing the corporation an estimated $100,000 for their work in preventing the requisition to replace the board of directors and to apply to the courts to appoint an administrator.

Jim created a new budget effective on 01 August 2010 that called for a
$1 million Special Assessment with the payments spread over twelve months.

Arrears
Fine and Deo sent Form 14s (notice of lien) to 37 units, 15% of the total, because their common maintenance fees were in arrears.

Shared facilities
The Shared Facilities was also in a financial mess. Some Shared Facilities were closed as there was no money to run them. The variety store had not paid its rent in years and owed the Shared Facilities $58,000.

Property maintenance
The administrator met on site with the property managers (Channel), on average, twice per month. One of their main priorities was to review the monthly financial statements, control the spending of the condo corporation, and improve the maintenance of the complex.

Jim worked with Channel to replace the parking garage doors, replace the unsafe garbage compactor, review and renew several maintenance contracts, improve security lighting, correct numerous fire safety deficiencies, upgrade the security control systems at the entrance to the complex, retain a new security company for the shared facilities and to generally improve the overall efficiency of the corporation.

The administrator also hired an engineering company to inspect the garage and balcony repairs and conduct a Reserve Fund Study. The previous studies were either not done or never completed.

Why keep Channel?
On 14 July 2012, the Social Committee sent Jim Bezemer a letter stating that it was “disturbing and unclear how they are still managing this building. Channel was viewed by most homeowners with contempt and at best as ‘the mediocre value for the money’. It is difficult to absolve Channel of some of the responsibility for current financial crisis.

If they are kept on, what criteria have they met?”

The committee also questioned Jim’s estimate that the total bill for the court procedures would reach approximately $100,000 when Fine & Deo presented an invoice in court for $62,514.57. Why, they asked, such huge difference?

The letter also stated: “Mr. Bezemer, it is disappointing to read in your Newsletter that you recommend a one-time Special Assessment of a few thousand dollars as it provides cash flow and allows owners a better opportunity to sell their units. Was not the focus of the Application to appoint an Administrator to rebuild financial health for the future of this building, not initiate selling frenzy?

Five months into his administration, on 24 September 2010, Jim Bezemer finally terminated Channel Property Management. Their last day was 31 October 2010.

What happened?
In his 24 November 2010 newsletter, Mr. Bezemer stated:

“Lastly, during my current tenure as Administrator, I have been contacted by numerous owners asking how MTCC 710 could've fallen into such financial difficulties. In essence, they believe that someone should be held accountable for the decisions made and in particular for what the owners perceive as mismanagement on the part of previous Boards of Directors and managers.

While, I believe that I am not obligated to conduct such an investigation under the court order appointing me to MTCC 710, I have been looking into how this financial crisis developed in light of owners' inquires. At the time of writing this report, with the exception of one voting irregularity at the time of approving the second loan, I have not found indications of suspicious activity or questionable transactions. I do believe however, that several bad business decisions were made by those in control of the Condominium's finances and that most owners did not understand the implications of borrowing millions of dollars and depleting the Reserve Fund. I hope to be able to further report on these matters once I receive the above mentioned report from Enerplan and have an opportunity to consult with them regarding the value received for the funds expended during the past several years. I expect this work will take place during the next several months.” (emphasis added.)

top  contents  chapter  previous  next