Angry owners take control of a condo board plagued by controversy
CBC News
By John Lancaster and Mike Smee
06 July 2017

A small group of people accused of aggressively taking control of GTA condo boards — and their multi-million-dollar budgets — was replaced at the upscale Five Condos Wednesday night.

It's the second time in less than a week that the three men — Darryl McGregor, George Laczko and Ray Blanchard —have been replaced on a downtown condo board.

An investigation by CBC Toronto beginning in May showed the three men, along with several associates, sit on the boards of about a dozen condos in Toronto and Mississauga, even though they don't always own property in the buildings.

Of the three, only Darryl McGregor owned a unit at Five Condos, in the Yonge and Wellesley neighbourhood at  5 St. Joseph St.

The owners held their annual general meeting Wednesday night, at which they'd planned to oust the sitting board members and elect a new board made up of residents in the building.

Brian Horlick, the lawyer who represented the board at 5 St. Joseph St. when it was controlled by George Laczko, Ray Blanchard and Darryl McGregor, chaired Wednesday night's annual general meeting at the Toronto Marriott Bloor Yorkville hotel. (Mike Smee/CBC News)

Instead, it was announced that McGregor and Blanchard had resigned, along with another controversial board member, Sam Cheng.

Laczko resigned some time ago from the board at Five Condos.

None of the former board members showed up at the meeting.

"I am so excited that this community has pulled together," owner Christine Dingemans said shortly after she was elected to the new board last night. "We've managed to take back our building."

Five Condos has 539 units and a $2.6 million annual budget.

Brian Antman, an auditor with the accounting firm Adams and Miles, at Wednesday night's meeting of owners from the condo at 5 St. Joseph St. His firm completed the audit of the building's finances.

Last Thursday, owners at one of the city's best known new highrises, the L-Tower on The Esplanade, called a meeting at which they planned to eject McGregor, his girlfriend Anastasia Mustafina, Laczko, Blanchard and an associate, real estate broker Kaive Wong, according to condo lawyer Denise Lash.

But when the meeting convened, none of those directors showed up, said Lash, who was hired by the building's owners. All five were replaced in a unanimous vote.
 
Condo board directors are not salaried employees, but they control budgets worth millions of dollars.

At Five Condos, where the three have been in charge since last summer, owners are now facing a lawsuit that claims $650,000 in damages. It was brought by the property management company that was fired by the board, including  McGregor, Laczko and Blanchard, shortly after it took control.

Audited financial statements, which were also presented at Wednesday's meeting, showed the condo corporation has accrued about $440,000 in unpaid bills since last summer, when the board took over from the developer, and a deficit of about $278,000, according to Dingemans.

Provincial regulations say board members need not own property in a building they represent or even live there.

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Toronto condo board directors resign amid financial questions
Tu Thanh Ha
The Globe and Mail
06 July 2017

Two men alleged to be linked to proxy irregularities at board elections in several Toronto condos have resigned as directors from one of those towers, leaving behind a deficit and financial records that unit owners criticized at their annual meeting.

The resignations of the two men, Darryl McGregor and Ray Blanchard, came after an article in The Globe and Mail and reports by the CBC raised questions about whether they were involved in a concerted scheme to seize control of Toronto condo boards and their multimillion-dollar budgets

At one of those buildings, the Five Condos tower, residents heard at their annual general meeting Wednesday night that, after a year in operation with Mr. Blanchard and Mr. McGregor as directors, the condo corporation had run up a deficit of more than $278,000 in its operating fund.

the corporation was so cash-strapped that the meeting room had to be paid on the credit card of one of the unit owners

Attendees were told that the corporation was so cash-strapped that the meeting room had to be paid on the credit card of one of the unit owners, Christine Dingemans, a director who had opposed Mr. McGregor and Mr. Blanchard during their term.

The Internet service for the property manager hadn’t been paid and was cut off two weeks ago, forcing the front desk concierges to work with their own laptops or phones, Ms. Campbell said in an interview.

The room broke into applause when the chairman of the meeting announced that Mr. McGregor, Mr. Blanchard and another director, named as Sam Cheng, were resigning.

It was the second time within days that the pair had ceded control of a condo board.

Last week, Mr. McGregor, Mr. Blanchard and three others associated with them had been removed from the board of the L Tower condos. Owners there elected a new board at a meeting where the previous directors didn’t show up, lawyer Denise Lash confirmed.

At Five Condos, several owners voiced concerns about the shape of their corporation’s finances. “We’ve had a failure of corporate governance at every level,” said unit owner Jennifer Campbell, who was elected to the board Wednesday night.

The financial statements presented at the meeting mentioned a $7,910 expenditure for “consulting.”

The page with the auditor’s note giving more detail about that item was initially not in the information package sent to unit owners ahead of the meeting.

The missing page

The missing page, which Ms. Campbell later requested, states that $3,537 in commissions were paid for utility contracts to a firm controlled by one of the departing directors.

The document also says that $5,876 was paid to a relative of a director for “proofing of documents.”

The note does not identify who that director, or directors, are. Mr. McGregor is the only listed officer at Perfect Clarity, a company that says on its website that it is an energy procurement firm.

Another expenditure was $50,000 to install LCD monitors in the lobby and parking.

The unit owners also heard at the meeting that their corporation’s $281,465 reserve fund had not been invested. Instead it was placed in an interest-bearing bank account only one month before the end of the fiscal year.

At the request of the Five Condos assembly, auditor Brian Antman revealed that his recommendations after reviewing the books included that:

•	The corporation should follow a closed-bid procedure when awarding contracts.
•	The board needed a formal investment plan.
•	Minutes of board meetings needed to indicate prices given to award contracts, and to indicate if there were conflicts of interests.

Neither Mr. McGregor nor Mr. Blanchard were present at the assembly.

The chairman of the meeting, lawyer Brian Horlick, has represented the corporation and Mr. McGregor and Mr. Blanchard in condo-related disputes.

Neither Mr. Horlick, Mr. McGregor and Mr. Blanchard, have previously replied to queries from The Globe.

Court records, condo documents and interviews show that Mr. McGregor or Mr. Blanchard or people connected to them have been involved in elections in at least six different Toronto condo complexes in recent years. There have been allegations of proxy irregularities at five of those elections.

At Five Condos, the controversy began last summer at the turnover meeting, the assembly at which control of the new building’s corporation is handed to the unit owners.

At the meeting, three board candidates, Mr. McGregor, Mr. Blanchard and George Laczko, sat separately, not acknowledging that they knew one another. They were elected and later said they represented the same unit, No. 1306. The unit had been purchased the previous month by Mr. McGregor.

Two weeks later, however, a lawyer for the condo’s developer raised concerns because 34 of the proxies didn’t specify the names of candidates.

Another vote was ordered, but the three men got a court injunction postponing it to October. Meanwhile, the interim board, in which they held a majority, voted to terminate the contract of the property management firm, FirstService Residential.

FirstService is now suing the directors and the corporation for $600,000 in damages, saying in its court claim that the directors “acted deliberately and maliciously in pursuant of their own personal agendas.”

The corporation, which had budgeted $1,693 for legal expenses, has spent more than $88,000 for lawyers’ fees.

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