Vancouver condo sold to developer against owner's will

A long and expensive court fight over condominium repairs has ended with a Vancouver man being forced out of his paid-off home.

A B.C. Supreme Court justice ruled Craig Fraser's condo could be liquidated — along with the rest of the three-unit building — after the two other owner-investors couldn't or wouldn't pay the repair bills for a leaky roof. 

"It came down to two [owners] against one," Fraser said. "So, now I'm faced with a tough economy, being self-employed and having to move and rent and start over."

An investor was allowed to purchase the entire building at 1029 West 7th Avenue for the land value, approximately $1 million, following a July 23, 2008 court decision by Justice Victor Curtis. By contrast, the court estimated the building would have been worth about $2 million fully repaired.

"It's appalling," Fraser said. "I am just absolutely appalled."

Fraser has the biggest unit in the building, which the court said would have been worth an estimated $800,000 after repairs. Instead, the self-employed single father with a three-year-old daughter said he will get a cheque from the sale for approximately $350,000. He has to be out by March 12.

'I will probably never recover'

"I will probably never recover financially — I mean I am 48 years old. It's devastating and it shouldn't happen to anybody," Fraser said.

"Judges aren't, unfortunately, accountable [for their judgments] to anybody.

"I wish the table was turned and I could say to the judge that I have the power to force you out of your house and see how it affects you and your family."

The battle began after Fraser hired an engineer in 2005 to assess his unit for renovations. The engineer found the building needed major roof and other repairs, and the City of Vancouver stepped in and declared it unsafe.

That triggered the long and expensive court exchange among the three owners over proposed repairs estimated to cost $650,325.

Mary Buchanan, a realtor who lives in California, and Maurice Duteau, a mechanical engineer who lives in China, ultimately said they couldn't cover their share of the cost, while Fraser said he would.

"They just decided that they didn't want to repair it, and managed to convince the courts," Fraser said.

'We're facing some much greater problems' — Tony Gioventu, Condominium Home Owner's Association

As foreign investors, Fraser pointed out, the other two owners are able to write off losses against their taxes, while he has simply lost his primary residence.

In his reasons for judgment, Curtis wrote: "Ms. Buchanan and Mr. Duteau have advised … they do not have the financial resources to fund the repair costs. I have no reason to disbelieve them on that issue. The result is, if the repairs are ordered, they will default on their levies …"

"It is unlikely a purchaser would want to buy into the existing situation. In my opinion, the only way to realize a reasonable value … is to place the property for sale free of existing disputes and governance problems," Curtis concluded.

Legal fees hit $100,000

Fraser said he spent $100,000 on legal fees, as well as $112,000 for engineer, architect and permit fees while preparing for repairs that were never undertaken. He's also on the hook for his share of $50,000 in fees for the administrator appointed when the strata became dysfunctional.

Fraser said is not confident he can recoup any of his costs from the other owners. After all is said and done, he estimates he will have lost $500,000 in home equity and the cost of the fight.

"That's it — and I had a house paid for," Fraser said. "Nothing has worked out in my favour. It's just been horrific bills — and gone nowhere."

When contacted in California, Buchanan refused to speak with CBC News about the case. Duteau wrote back from China that Fraser had caused his own difficulties by trying to get the others to pay more than their fair share for repairs.

"Craig Fraser brought the situation on himself by trying to get his condo updated at Ms. Buchanan's and my expense," Duteau wrote.

He said one of the reasons for the deadlock in this case was the B.C. rule — under the Strata Property Act — that requires approval by three quarters of strata members before repairs can go ahead. Without unanimous agreement on what those repairs should cost, he said, an approval vote was impossible for the three members.

"You found a good example of how things can go wrong under the current system," Duteau said. "This is the last strata property I will ever have anything to do with."

Condo group predicts more liquidations

"It's not the only liquidation that we've seen take place," said Tony Gioventu of B.C.'s Condo Home Owner's Association (CHOA). "We're going to see probably a greater list of strata corporations that are incapable of meeting their financial obligations."

Gioventu said he's aware of two other recent court-ordered liquidations. He expects several more — in leaky condos where repairs have been deferred for years while owners are embroiled in disputes over money — particularly given the current market downturn.

"We will be dealing with developments of several hundred units each  that are incapable of doing the repairs, have no money, the debt loads are excessive, the buildings can't be occupied because of structural failures," Gioventu predicted.

"We're facing some much greater problems. And a lot of it is attributable to deferment of obligations."

Gioventu cited a 300-unit complex at Nanaimo and Broadway in Vancouver where the owners can't afford or agree on repairs. He believes the estimated cost of repairs has soared by 1,000 per cent while the fight has raged on.

He said CHOA has been lobbying B.C.'s current government for years to amend the Strata Property Act. It wants it mandatory for stratas to have an adequate reserve fund to cover all future repairs.

"If they had enough money in their [strata] bank accounts we wouldn't be dealing with the type of disputes we are dealing with," said Gioventu, who pointed out that would also mean higher strata fees for B.C. condo owners.

CHOA also wants a streamlined dispute resolution system, so owners who can't agree don't spend their life savings fighting each other.

"It's long overdue for legislation," he added. "There is a desperate need to upgrade dispute resolution for strata corporations in the province."

B.C. government may change the law

B.C. Finance Minister Colin Hansen, who is responsible for the strata law, said his officials are consulting with condo owners on changes, but he didn't say when those changes might come.

"Not all of the strata property groups have decided to become part of our consultation process, which is unfortunate," Hansen said. "But the welcome mat was certainly put out.

"Were certainly looking at ways of how we can provide more flexibility more options and less expensive options for dispute resolutions among strata property owners."

Fraser had some suggested changes of his own.

"The law should be, if people want to get out — for whatever it takes to get them out — they can sell. But don't force people that want to stay in their own homes out. That's what the law should read. The way it is now, it's majority rules."

Fraser suggested all B.C. condo owners should take a close look at whether their strata can handle future repairs.

"I think we are all going to have serious trouble  when time ticks on and buildings aren't maintained."