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James ()
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Is Alberta & BC a Condo Owners Paradise? 2012/02/26 02:52  
I have been reading postings by Alfonso, and others, stating that condo owners in Alberta and BC have government owner protection that Ontario needs to copy.

Back in the 1970s, when worker alienation was a big concern to the manufacturing industry and the unions, some academics were urging American and Canadian governments to follow Germany where the government forcing companies to put union executives on their board of directors.

Others claimed that the Swedes had the answer. Volvo had assembly workers build cars in small self-directed teams. That is what our manufacturers should do.

Both examples seemed the ideal solutions. Why? Because Europe was so far away and we could not speak German or Swedish.

In reality, the Swedes dropped the self-directed teams because they were too slow and expensive while the Germans bought off the union board members with cash, foreign trips and wild drunken orgies with prostitutes.

So could the dream that Alberta and BC holds the key to condo owners happiness here in Ontario be equally flawed? I suggest maybe so.

Look at this news report:

Alberta condo construction woes flagged 3 years ago
Government offers sympathy but no action on condo construction mess
Charles Rusnell CBC News
Posted: Feb 24, 2012

A government committee identified problems with Alberta’s residential construction practices and lax inspection regime three years ago, but critics say the committee’s recommendations have never been acted on.

The committee, led by Edmonton Conservative MLA Thomas Lukaszuk, issued a report in December 2008 which found Alberta’s system of construction and inspection "is not performing adequately to protect the home or condominium owner."

Liberal housing critical Hugh Macdonald said, “the government has to quit pretending this is not a problem. Surely they can review Mr. Lukaszuk’s report from 2008 because this has gone on and on."

“More and more condominiums are being built,” Macdonald added. “People are looking at them as an attractive way to enter the home market. But yet we have builders that are knowingly duping these consumers and the government is doing nothing about it.”

But serious problems with condos in the province’s booming construction industry continue to surface.

In the last three years alone, hundreds of Albertans have been forced out of their condominium complexes because they were too unsafe to inhabit. Thousands of other Alberta condo owners have had to spend tens of millions of dollars to repair crumbling buildings, many less than a decade old.

Last year, about 300 residents of the Penhorwood complex were ordered to leave in the middle of the night because officials feared the nearly new building would collapse. Last year, they voted to borrow $35 million to rebuild the entire condo project.

(How would you like to have to take out a loan for $35 million to rebuild your condo complex? I imagine their having to continue to pay their mortgages as well.)

Earlier this week, about 150 residents of the Bellavera Green Condos in Leduc were given an eviction order because of serious fire-code issues.

As an assistant deputy minister of Municipal Affairs, Ivan Moore served on the committee that produced the 2008 report. Last year, after a series of stories about expensive repairs to crumbling condominiums, Moore said to CBC News there was nothing his department could do.

“Unfortunately, we don’t have the (legislative) tools yet to provide them with the protections that we are building,” Moore said. “And all we can do at this point in time is sympathize with them and let them know that what they’re going through will at least help make things better in the future.”

On Thursday, Alberta’s current Municipal Affairs Minister Doug Griffiths offered more sympathy, this time to the Leduc condo residents who are facing eviction.

But Macdonald says sympathy won’t pay the mortgages of those condo owners.

“Sympathy does nothing, absolutely nothing for these people,” he said. “When they go to their bank, or their lending institution, sympathy means nothing.”

Griffiths said his department is continuing to work “expeditiously” on several initiatives, including a new home warranty program, better training for safety codes officers and increased fines for building-code violations that will help protect future condo buyers.

Griffiths said he hopes to introduce new legislation this fall.

(Hopes? This fall? Isn't that a little weak? Is it possible he wants to give the industry time to finish building and selling their present inventory before the rules change?) legislative.html
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Licensing Managers Just The Beginning 2012/02/26 07:49  
Al takes any idea he can lift from here.

He has yet to deal with construction defects, conversions, phased contruction and Tarion.

In both Alberta and BC, constuction standards are a big big issue!

Your lease must be coming up for renewal James. At least in rental land you get 90 days notice before the rent goes up.
Richard Forster
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James ()
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Re: You're too hard on Alfonso 2012/02/26 09:19  
"He has yet to deal with construction defects, conversions, phased contruction and Tarion."

I both remember his postings and I too have a copy of his book. Read them again.

His building, 238 Albion, started as a rental building when the developer could not sell enough units. A few years later, the developer converted the rental building into a condo.

The builder did not complete the building so the board of directors sued the developer and foolishly rejected a reasonable settlement. The board lost in court and had to pay the developer's court costs plus their own.

Many of the building's future woes started from that.

You are being too hard on Alfonso. His book is based on his personal experiences in one troubled condo not an encyclopedia of all problems a condo owner can face.

You are right. Renters get prior notice of any planned rent increases and information on how to fight against the landlord's application prior to the hearing. There are no surprise letters announcing unexpected increases in maintenance fees or Special Assessments.

We also will receive a $200.00 gift certificate as a sweetener if we renew our lease for another year.

Our rental building belongs to an industry association so if there are any serious problems with our unit or building, not only can we complain to the city but we could also file a complaint to the association.

Finally, there is also the private owner who would be interested in hearing of any serious issues with his building.
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Getting The Facts On The Table - Nothing More/Nothing Less 2012/02/26 10:03  
Al wants to spin his story that way. He wasn't around here in the 70's, when condos were new and buyers would not write a cheque and wait 3 years to start paying an occupancy fee.

Condos were not real estate news then either.

It was not until the deposits were protected, occupancy fees were created, and the turnover legislated, that the model of pre-sales came to be. That was not until the mid 80's.

In the 70's they built first, took the construction write-offs by renting during the sales cycle, and managed it to cover where they cheated, while getting paid along the way. Government programmes such as MURB created tax shelters for such construction. Since rental accomodation was not being built, often retaining or building rental accomodation was part of the deal to get city approval.

You also have access to the Rental Tribunal, if there is a dispute. You don't need a lawyer or to visit court and wait 2 years for an answer. You have a complaint resolution path and model, that gets results. Condo owners do not.

If you have read the book, you must be scratching your head too then. It is there in black and white, that anyone collecting proxies for quorum only is trying to stop people (that would not be attending anyway) from voting, and allow only those that attend to rule the condo!

Splain that one?? The book does show boards can spend more time on politics and lawyers, rather than long term planning. That is also the difference in your rental building, somebody has a plan, for the real estate, not just getting elected or being a celebrity selling books.
Richard Forster
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Laws Changed Then And Can Change Again 2012/02/26 18:18  
When Al's building was born, reserve funds were not mandatory, that came later.

Legislation was changed so the Engineers reports were no longer ordered, paid for and tucked away unseen by the developer/builder. Getting gullible boards to sign off on substandard construction, was part of the game.

Laws changed, then and need to again!
Richard Forster
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James ()
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Re: Alberta Condo owners given 15 minutes to evacuate 2012/02/27 00:54  
The Condemned
Sep 1, 2011
by Anthony A. Davis

At around midnight on a Friday in March firemen hammered on the doors of the 168 units in the Penhorwood Condominiums. Tammy Connor and her husband John were sound asleep. Connor has difficulty describing that night and its consequences.

A fireman handed them an evacuation letter from the city and told them they had 15 minutes to collect medication, documents and over-night bags and get out. The Connors, along with their West Highland Terrier, Ramsey, and a stream of 300 other residents quickly filled up the nearby sports centre.

Completed in 2003, the 168 units in Penhorwood are a collection of seven light-grey, three-story buildings in Fort McMurray. They are generally small, starter condos occupied by young couples, pensioners and single working people, many of whom are renters. They cost in the neighbourhood of $2,000 per month. But the authorities came knocking on that late March evening because they had deemed the entire complex unsafe, and Tammy and John Connor and the rest of the residents of Penhorwood haven’t been back since. They may never be able to return.

Critics say the Penhorwood debacle exposes a faulty building inspection system in Alberta, and that, especially because of boom-time construction from 2002 to 2006 (when there were 201,042 housing starts), there are likely more crumbling residential complexes out there. In June, three months after Penhorwood – but not because of it, the Alberta government insists – the province announced significant fine increases for builders discovered to have violated the Alberta Building Code. The government also asked the Safety Codes Council, which accredits the inspection officers who do residential inspections in Alberta, to conduct “a broad review” of its training system and inspection regime. And Alberta Municipal Affairs, the ministry responsible for the Alberta Safety Code and the inspection system, plans to make home warranties mandatory on all new homes and condos.

While residents of Penhorwood knew their condo association had been in litigation for several years with the condo developer, Prairie Communities Corp., over alleged deficiencies like heating, roofing and cladding problems, it wasn’t until the night they were evacuated that they knew there were also serious structural issues. The buildings, they were told, could collapse.

Repeat that basic story 167 times and you get a sense of the scale of this disaster and the enormous financial and emotional toll it is taking on Penhorwood renters and condo owners, and even on Fort McMurray itself. The Connors now live in a townhouse where the rent is twice what their mortgage is, a mortgage they are still paying. Some families have had to declare bankruptcy. Connors says she knows of pensioner couples living in dingy accommodations because they are too poor to pay both a mortgage on an unliveable condo and rent on other living quarters. One young woman who lived in the building told television reporters two weeks after the evacuation that she was homeless and had to send her baby daughter away to be cared for by relatives because she had lost everything and had nowhere to go. “We need somebody to help us,” she pleaded.

The Penhorwood case is not a simple one, and many facts remain to be proven in court. But even before the buildings were evacuated on that cold March night, residents were involved in a lawsuit with developer David Marshall of Prairie Communities Corp., the Rural Municipality of Wood Buffalo, a slew of engineering firms and the inspection agency contracted by the municipality, Alberta Permit Pro. Permit Pro’s inspections missed serious problems. Since the evacuation, the condo association’s lawsuit has been amended from $5.5 million to $60 million, because, the association contends, Penhorwood is in such bad shape that no one will ever be able to live in there again. It may have to be torn down.

In the meantime, Marshall, who says he’s retired from the building industry, is filing a $59 million countersuit against the condo association. In it, he claims that the board could have mitigated many of the problems but refused to do so, preferring instead to use tactics that resulted in an unnecessary evacuation and a bigger lawsuit. Reached near Las Vegas, where he was vacationing, Marshall acknowledges there were structural issues at Penhorwood involving missing “squash-blocks” from I-joists, but says that his offers to fix the problems were rejected.

Al Penner, a condo board member and developer, was involved in selling 72 Penhorwood units. He says he has volunteered hundreds of hours to help Penhorwood residents “because this type of occurrence and the one in Calgary across the street from my office are an embarrassment to my industry, and I believe people in my industry have an obligation to attempt to ensure that people are stopped from doing this.” Penner’s office is across the road from the Bella Vista Condominiums, which, the CBC has reported, require major renovations because of building code violations. Owners there are facing remediation bills of between $77,000 and $189,000 each.

Penner says he believes condos are a good investment and living choice for Albertans, but “the risk of more poorly built condos is huge. If I personally felt this was an isolated incident, I would not have devoted much of the last six, seven years of my life to this as I have.” It will take the courts until at least 2012 to sort out the facts in the case, but it does call into question what some see as a flawed provincial inspection system.

British Columbia has already been down this road. Slews of leaky condos built in Vancouver in the 1990s forced the B.C. government to offer interest-free repair loans to buyers. In all, it’s estimated that there could be more than 80,000 leaky condos in B.C. The scandal spurred the B.C. government to create the Homeowner Protection Office in 1998 to improve the quality of residential construction and enhance protection for consumers buying new homes. The total cost of those repairs is estimated at $4 billion.

Christine Burton, a condo owner, lawyer and president of the Penhorwood condo association (PCA), says a “long chain of command” failed her and other condo buyers in Fort McMurray when structural engineers, geotechnical engineers, the architect and others used their professional designations to sign off on various Penhorwood components they said met Alberta building and safety codes. Safety Code Officers (SCOs) with Alberta Permit Pro later accepted those signoffs without checking the components. “That’s where it starts to breakdown, when those things aren’t done properly,” she says. “But the buck also stops with the building inspectors, who have obligations that they meet code.”

In Penhorwood’s case, it was crucial I-joists that were the straw that broke the condominium’s back. I-joists have, in many construction projects since the 1990s, replaced two-by-ten or two-by-twelve boards as the I-joists that support the floors and walls of wood-frame buildings. These I-joists, weighing as little as one-third of the boards they replaced and using far less wood – thus being better for the environment – are “stronger than a solid piece of wood,” says Penner.

However, on the ends of these I-joists, especially where they bear the heavier weight of walls, it’s necessary to install so-called “squash-blocks” alongside the ends of the I-joists to reinforce them at the load-bearing points. Made of short lengths of sturdy wood, these squash-blocks are hammered in place and take the brunt of wall loads, preventing the I-joists from deforming at their ends. Without them in place, the I-joists can bend, sag, crack or completely fail, seriously affecting the structural integrity of a building.

Marshall says the I-joist system he used was designed by a company called Nascor, and that his framers built the joists according to plans. But Marshall contends that Nascor’s supplied software led to a failure to place some crucial blocks. Nascor’s own inspectors gave the Penhorwood project the nod, but the problem, Marshall says, was not the kind of thing later inspectors would readily notice. But “it failed, and I offered to the condo corporation for us to go in and fix those blocks or to fix those joists…We offered that and we were turned down.”

Brian Alford is President of the Safety Codes Council (Alberta). His organization has been managing the safety code system in Alberta since 1991. It is unique in Canada as the only non-government, non-profit organization that accredits the municipalities, agencies and corporations that sell permits and inspect the work carried out under those permits.

They also certify and train the SCOs who do the inspections. But Alford admits that while houses are often inspected three or four times during construction phases, it is standard practice in many cases for inspectors to examine larger buildings such as condos and apartments – projects that usually have engineers involved – after cosmetics such as drywall and paint make it difficult to see any structural defects. As a result, inspectors tend to rely on signoffs by engineers before issuing occupancy permits. Those engineers, Alford says, “take responsibility within the act for the work that they are contracted to provide.”

In the Penhorwood case, the safety council (one of the few organizations not being sued by the condo association) “has yet to determine where the fault was,” says Alford. “But if it was with inspectors, then we will take action. If we found that an SCO was negligent or deficient in his or her duties we could take action, up and to the cancellation of their ability to be an SCO.”

Penner contends that when municipalities themselves are laissez-faire about inspections, inspectors, as alleged in the 33-page statement of claim the PCA has filed with the Alberta Court of Queen’s Bench against 26 defendants, start relying too heavily on engineers to be their eagle eyes. And in the case of the municipality’s contracted inspection agency, Alberta Permit Pro, that’s what the condo association says happened.

The bulding boom decade, with its promises of easy money and the resulting pressure to put up projects as quickly as possible, may have been a factor in inspection sloppiness if the PCA’s allegations prove true. An affidavit from Al Penner filed in support of Penhorwood’s lawsuit alleges that: “On September 18, 2003, Russell Dauk and Dan Whelton of RMWB and Dan Kuhn of Permit Pro admitted to Al Penner that they had been ‘…forced into a dangerous level of tolerance with developers because of a housing crisis.’”

“Speaking purely as a developer,” Penner says, “the reality is I have been aware for some time that there are opportunities for unscrupulous developers to slide stuff through the system. Responsible developers don’t slide stuff between the cracks, but the cracks do exist.”

Both the municipality of Wood Buffalo and Alberta Permit Pro are named as defendants in Penhorwood’s $60 million lawsuit. “The building inspectors’ role is additive to the professionals, not in lieu of it,” Penner says. “In my last communications with Alberta Permit Pro they took the position that we’ve got engineers and architects that signed off on things, therefore our backs are covered. Those were the inspector’s very words to me. Of course the professionals are taking the same position saying the ‘building inspectors signed these occupancy permits, so our butts are covered because he signed off.’” Penner contends that makes for a circle of mutually assured security for the developers, builders and inspectors. But, as with Penhorwood, it can literally leave home and condo buyers out in the cold.

The question now facing Alberta home and condo buyers is a simple one. If building and inspection problems exist, as the problems at Penhorwood and Edgewater projects seem to suggest, will the recent announcements by Municipal Affairs minister Hector Goudreau do anything to fix them?

“The vast majority of homes in Alberta are built well and stand the test of time,” Goudreau said on June 7 when he announced a mandatory home warranty program for future residential homes and buildings built in the province. Currently, only about 80 per cent of new homes and condos are covered by warranties, a form of insurance the builders buy from private insurers.

Some critics, including Tang Lee, a University of Calgary professor who has been teaching architecture for three decades, believe the mandatory warranties do more to protect the builders who pay for them than buyers. But Ivan Moore, the assistant deputy minister of Municipal Affairs, contends that private sector companies underwriting warranties will help weed out bad builders because the insurers don’t want to have to pay out for big repairs down the road. If warranty companies refuse to provide warranty certificates to builders with bad reputations, they will not be able to get building permits in Alberta.

The big stick of fines will also reduce sloppy work, Moore says: the maximum fine for a first offence will increase from $15,000 to $100,000 and for subsequent offences from $30,000 to $500,000. “We took a multi-faceted approach, because what we found when we looked at these issues is that there is no silver bullet, no single response to this.”

He notes that since B.C. brought in a similar warranty program after its leaky condo scandal, “the overall quality of construction has gone up measurably, and they have seen their mandatory system weed out those bad actors.”

Moore concedes that “there is room for improvement in the inspection system. We are taking it on with the Safety Codes Council in terms of looking at how to focus on critical items better.” He says the government also wants to help educate buyers and owners so they know better how to ensure they are buying quality accommodations and are better prepared should issues arise.

Al Penner and the Penhorwood Condo Association aren’t expecting the recent changes made by the government to completely address the problems they’ve had to deal with. Instead, they think that a positive verdict for them in the courts is what will really clean up the building and inspection regimes in the province. “All we need is some case law,” he says. “If this one goes through in the end, to say you are responsible, you the developer are responsible regardless of the fact that your engineers certified this, and your building inspector certified it. You are still responsible. You cannot say it’s not my fault because it passed inspections. And similarly, the professionals who sign off on these things, and the jurisdictions having authority, are all equally responsible…someone has to get slapped by the courts.”

Shortly after the Penhorwood evacuation, Alberta Permit Pro, led by Rick Kersher, declared bankruptcy. Kersher and his partner, Matthew Korobanik, denied to the Edmonton Journal last April that the move was to insulate them from liability should Penhorwood win its lawsuit.

However, Kersher and Korobanik did start up another inspection agency under the name Innovative Inspection Agency with the intent of continuing to conduct inspections. In May, however, the Safety Codes Council cancelled Innovative’s newly-acquired accreditation, the first time in its history that it had revoked a recently approved accreditation.

For Innovative, that means it can no longer conduct inspections in the province. Reportedly, the council did so because of issues with paper work and unauthorized access of data from municipalities.

Ironically, the Regional Municipality of Wood Buffalo’s own non-profit arms-length agency, the Wood Buffalo Housing Development Corp., is suing the same now-defunct inspection agency as the Penhorwood Condo Association. The municipality had contracted Alberta Permit Pro to inspect all new residential construction projects in the region. It accuses the company of failing to properly inspect or report major structural, mechanical, fire safety and other deficiencies at one of its condo projects, Edgewater Court. Edgewater was extensively damaged by an April 2007 fire caused by a discarded cigarette. When the housing corporation hired engineers and builders to rebuild the structure, they discovered major deficiencies from the original construction that helped the fire spread more rapidly.
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Mickey ()
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Re: Alberta outsources building inspections 2012/02/27 07:37  
Wow, so the west has its problems too. Not quite the condo paradise that Alfonso thinks it is.

After reading these postings I see several issues that lead to these condo disasters.

1. A hot market so there was a lot of pressure to build fast.
2. Outsourcing building inspection to private contractors.
3. Developers/builders out to make a fast buck.
4. It is so easy for companies to go bankrupt and immediately start up under a new name.
5. Builders, engineers and inspectors can all blame each other and deny accountability when things go wrong.
6. Owners buying condo units before they are built.
M. Kutuzov
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Re: Alberta May Need To Learn Too! 2012/02/27 10:38  
Managing the properties is just one reform issue.

Construction and building inspections are municipal standards here?? The province only shows up when a crane falls over.

You can see when the managers are the arm of the builder, things can get off track, during any warranty period as a cover to shoddy construction.

We also compare the Ontario experience, of engineers reports, turnover, Tarion etc. As an engineer you can understand that when the builder orders any inspection, a board might never see it. The study/report was the property of the developer until somebody figured out where that can go wrong and changed it, here in Ontario.

As an engineer you should be able to tell us what owners/buyers need to see, even if their board can't.

The owner that reported costruction problems at Albion, to the city, should be viewed as doing their jobs when the board won't see.

Alberta was the last province to pass human rights amendments and protections too. They actively tried to resist!
Richard Forster
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James ()
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Re: Alberta Condo disasters continue 2012/02/28 21:30  
Another condo situation like the Penhorwood one

Fri Feb 24, 2012
LEDUC - There was supposed to be a rooftop garden, rainwater recycling and a community Smart car for residents of the environmentally friendly yet luxurious condominium complex.

But the Bellavera Green touted in promotional material is a far cry from the unfinished and partially abandoned building that sits now on the western edge of Leduc. This week, the promise of “visionary, urban” living was replaced by an evacuation order from the Leduc fire department, citing “critical life-safety concerns.”

About 150 residents living in the building’s 85 completed units have been told they must be out by the end of March.

“We’re desperate to work with the people responsible for the facility to see this thing made safe,” Leduc fire chief Ernie Polsom said Thursday. “But we don’t see any way that it can be done in the short term. The issues are just that serious.”

In mid-December, an inspection at Bellavera Green condos, at 6201 Grant MacEwan Blvd., revealed, among other violations, a fire alarm system not up to code, firewalls that had been damaged or removed and an exterior staircase that had to be condemned. The unfinished second phase of the building was effectively abandoned and left unsecured. If there was ever a fire, Polsom said, the access route is too small for fire trucks to fit through.

An order to fix the problem was ignored, leading to the evacuation order issued Wednesday.

In the meantime, the city is expected to spend up to $250,000 to make the building safe for now, securing secondary fire exits and getting the sprinkler and alarm system functional.

Chris Melanson, 27, doesn’t know what he’s going to do after he’s forced to move out, just 13 months after he bought his first home for $254,000. “We’re taking it day by day,” said his fiancée, Jessica Bjorkman, 25.

Along with fire code violations, Polsom said there is evidence that the building is settling, causing cracks in the drywall and signalling possibly more serious structural problems. An engineering review would have to be done to determine what state the building is in, and ultimately, it’s up the owners to bring the condos up to code, he said.

However, there’s a “great deal of question about who actually owns and is responsible for them,” he said.

Bellavera Green Condominium Corp. is owned by Kevyn Frederick, and is involved in a slew of lawsuits with contractors, lenders, and tenants. Frederick could not be reached for comment Thursday. An address listed for the business is a UPS Store on Whyte Avenue that has post office boxes.

Frederick’s financial troubles extend to the hotel industry. He is listed as the sole director and shareholder of Hargate Properties. That company bought the Crowne Plaza Hotel, best known for its revolving restaurant, for $48.7 million in 2010. Hargate went into receivership in mid-November by order of an Edmonton Court of Queen’s Bench judge. Frederick is also listed as the sole director and shareholder of Château Lacombe Capital Partners Ltd., the company operating the hotel which also went into receivership.

Wayne Beaton, a member of the Bellavera Green condo board, said the project has been plagued with infighting and financial irregularities.

“You have a war game going on between a bunch of heavy hitters at the top, and the purchasers are catching the shrapnel at the bottom. They’re defenceless,” he said.

The most recent development came after the eviction notice Wednesday, in a letter notifying tenants that their rent had been assigned to one of the building’s private lenders. Rent is to go to the lender, rather than their landlords, it said.

“If you do the math, there’s going to be about 85 foreclosures and a lot of bankruptcies, because people are not going to pay their mortgages if they can’t collect their rent,” Beaton said. “They’re just picking up and they’re going to move out.”

Construction began at the site in the summer of 2009, and the building’s first phase was granted a partial occupancy permit in December 2010. Units were sold for between $130,000 and $333,000, Beaton said.

Occupancy permits were issued at that time because “these problems didn’t exist” then, Polsom said,

“There was very rigorous fire protection plans put in place as well as assurances from the developer and his co-ordinating professionals, the architect, the engineer, that the building met fire and building codes, and that work was going to continue,” he said, adding that if the building schedule had continued as planned, the current situation may have been avoided.

In Alberta, building, fire and safety standards are established by the province.

In larger cities and towns like Leduc, the municipality is charge of enforcing those rules through inspections and issuing permits. Some municipalities, including Leduc, have building inspectors on staff. Other communities contract those services out to private companies.

The problem at the Bellavera condos has rekindled a larger debate about protections for new home and condo buyers, which for several years now have been flagged as inadequate. A 2008 report for the government by Tory MLA Thomas Lukaszuk reported that Alberta’s system of construction and inspection “is not performing adequately to protect the home or condominium owner.”

The issue was back in the spotlight last March, when 300 people in Fort McMurray had to flee their homes in the Penhorwood Condominium complex in the middle of the night after an engineer’s report questioned the safety of the building. A series of lawsuits are underway and condo owners voted in November to demolish the complex and rebuild. In the meantime, owners must pay mortgages on units they can’t live in.

Municipal Affairs Minister Doug Griffiths said Thursday the government is sympathetic toward the Leduc condo owners facing eviction. “It is incredibly unfortunate when anybody like that gets essentially abused,” he said.

The province is taking action to improve the situation for consumers and will introduce new measures in the fall.

“We are moving forward with the increasing of the fines on building development violations, we’re working on increased training for safety codes inspectors. We’re working on the condo home warranty situation, which we hope to be able to bring forward this fall,” Griffiths said. “We’re putting a lot of different measures in place which we hope will, given other jurisdictions what they’ve done, we think we’ll see an increase in the quality of buildings so we can avoid this in the future.”

Liberal MLA Hugh MacDonald said the province’s long delay in embracing changes means consumers have been let down by the government.

“The most important purchase or investment in a consumer’s life is their house,” MacDonald said. “The government has a duty and responsibility to ensure that house, whether it’s a condo or residential home, is built to the building code. Unfortunately, in this province, this government has not been doing that on behalf of the citizens.

The proposed one-year home warranty program is not enough, he said. There need to be changes, including more rigorous inspections and a system that hold owners and construction companies accountable for problems.

“You can’t just trick consumers like this. This is a major purchase. It is the biggest purchase in people’s lives and we have to do more to protect the consumer,” MacDonald said.

With files from Keith Gerein

It doesn't sound to me that Alberta has the consumer protection model that Ontario should be copying.
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Alberta Has No Equivalent To Tarion 2012/02/28 22:13  
James, if you read Al's insightful discussion paper you would only see Alberta was suggested only for it's ability to license and regulate the management industry, as a start.

The article has nothing to do with the managers, it's about construction and the lack of home builder warranty.

You tell us they only have a proposed one-year warranty, Ontario already beats that.
Tarion here needs expansion too. Ten years for walls and windows, should be the minimum warranty. Conversion should get five.

Construction should be reform issue too.

Alberta took control of the property managers there because renters vote!
Richard Forster
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James ()
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Re: Alberta government offers condo owners sympathy 2012/02/29 20:46  
Alberta condo construction woes flagged 3 years ago
Charles Rusnell CBC News
Posted: Feb 24, 2012

A government committee identified problems with Alberta’s residential construction practices and lax inspection regime three years ago, but critics say the committee’s recommendations have never been acted on.

The committee, led by Edmonton Conservative MLA Thomas Lukaszuk, issued a report in December 2008 which found Alberta’s system of construction and inspection "is not performing adequately to protect the home or condominium owner."

Liberal housing critical Hugh Macdonald said, “the government has to quit pretending this is not a problem. Surely they can review Mr. Lukaszuk’s report from 2008 because this has gone on and on."

“More and more condominiums are being built,” Macdonald added. “People are looking at them as an attractive way to enter the home market. But yet we have builders that are knowingly duping these consumers and the government is doing nothing about it.”

But serious problems with condos in the province’s booming construction industry continue to surface.

In the last three years alone, hundreds of Albertans have been forced out of their condominium complexes because they were too unsafe to inhabit. Thousands of other Alberta condo owners have had to spend tens of millions of dollars to repair crumbling buildings, many less than a decade old.

As an assistant deputy minister of Municipal Affairs, Ivan Moore served on the committee that produced the 2008 report. Last year, after a series of stories about expensive repairs to crumbling condominiums, Moore said to CBC News there was nothing his department could do.

“Unfortunately, we don’t have the (legislative) tools yet to provide them with the protections that we are building,” Moore said. “And all we can do at this point in time is sympathize with them and let them know that what they’re going through will at least help make things better in the future.”

On Thursday, Alberta’s current Municipal Affairs Minister Doug Griffiths offered more sympathy, this time to the Leduc condo residents who are facing eviction.

“This is a serious concern and we sympathize fully with the people who are in this situation,” Griffiths told reporters.

But Macdonald says sympathy won’t pay the mortgages of those condo owners.

“Sympathy does nothing, absolutely nothing for these people,” he said. “When they go to their bank, or their lending institution, sympathy means nothing.”

Griffiths said his department is continuing to work “expeditiously” on several initiatives, including a new home warranty program, better training for safety codes officers and increased fines for building-code violations that will help protect future condo buyers.

Griffiths said he hopes to introduce new legislation this fall. legislative.html
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Re: Calgary condo project fined 2012/03/01 18:47  
Condo project owner Heritage Station fined $58,592
By Jason Markusoff, Calgary Herald February 7, 2012

The owner of a major Calgary condo project was fined $58,592 on Monday for disobeying a fire safety order.

Heritage Station Inc., which owns the southwest London towers, pleaded guilty in court to non-compliance with a provincial Safety Codes order. The firm had dragged its feet for months before finally verifying the two-tower complex’s fire-alarm system.

“Owners must know that when a fire safety codes officer orders work to be done on their property, that it must be complied with,” Deputy Fire Chief Brad Lorne said after the guilty plea.

“It’s a substantial fine, and it should send a message to every owner that courts take this very seriously.”

The guilty plea and the violation have had no impact on occupancy of the condos. Last summer, Edmonton-based developer Westcorp said that about one-quarter of London’s 719 units were still vacant.

In June 2010, a city fire inspector gave the property owner five weeks to submit final engineer’s verification of the alarm system for the two complete towers and the unfinished parkade that connected them.

Heritage Station appealed that order, and in the fall, the Safety Codes Council gave a new order for alarm verification by the end of November 2010. The owner didn’t fulfil the order until April 2011, according to an agreed statement of facts in the case.

Final verification of alarm systems is standard for completed developments.

“Especially when it’s a new building, we want to make sure that the fire alarm is in working order and built the way it’s designed,” Lorne said.

“It’s one of the most important things the fire service has to ensure the safety of the occupants.”

The London project was planned as a four-tower project with retail. There are 719 units in the existing towers, and Edmonton-based developer Westcorp said last year that one-quarter of the condos were unoccupied.

Derek King, lawyer for the project owner, noted after the court appearance that the inspector’s concern was verification, not any actual failure of the fire alarms.

“From Heritage Station’s perspective, everything in the structure was fully operational,” he said in an interview. ”Everything that was there was subject to partial verification on each stage.”

The owner is paying dearly for its lengthy delay in complying with the Safety Codes Council’s final order: $325 per day for submitting the proper documents 126 days after the deadlines, or $40,950 to the city on top of a base penalty of $10,000.

On top of that is a victim fine surcharge, paid to the provincial government.

Originally planned as four-tower development, the London condos, promoted heavily on radio ads, were touted as “redefining what a residential and retail neighbourhood should be”—a luxurious “balance between uptown living and suburban charm.” Close to the Heritage LRT station, it was to lead a new generation of transit oriented development in Calgary.

But more than four years after move-ins begun, retail hasn’t arrived. A bank branch is open, but a Shoppers Drug Mart that set up on the Macleod Trail side of the London project wound up closing. The city’s transportation department is taking the developer’s project security payment to build the overpass to the LRT station that was a condition of the development permit.
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Calgary Devleoper Fined 2012/03/01 19:18  
You can see that politics is not always the answer for condo owners.

It is hard to miss a crumbling tower, but stalling legislation, can pay, for those that don't want to be around to guarantee their product.

FORDs plan would just make the above easier. Condo owners will pay for the subway, with cuts to the quality of the construction, and and lifespan of the pieces.
Richard Forster
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Re: Leaky BC condos 2012/03/03 15:31  
The Vancouver Sun
May 11, 2005
Byline: William Boei

Whose fault is it that B.C. condos leaked and rotted, and who should pay to fix them?

Those are easily the most vexing questions raised in B.C.'s leaky condo disaster. And they are about to be asked again, as some British Columbians look to the federal government to shoulder some of the blame and pay some of the costs.

Vancouver lawyer John Singleton is seeking to have a class action lawsuit certified against Canada Mortgage and Housing Corp., claiming it knew 25 years ago that the building design and construction practices then being used were doomed to fail. CMHC should have done something, the suit contends.

John Cummins, Conservative MP for Delta-Richmond East, is going one step further. He wants the federal government to call an inquiry to assess Ottawa's share of the blame, and volunteer to pay its share of the bills.

Between them, Singleton and Cummins are bound to tear the scabs off some old wounds. Both suggest, directly or indirectly, that the federal government helped cause the problem. And that means the fat is in the fire, again.

Former B.C. premier Dave Barrett headed two provincial commissions of inquiry into leaky condos in the late 1990s.

The core of his findings was that hundreds of buildings leaked "as a result of poor or inappropriate design and shoddy workmanship."

"Not one example was brought forward where such buildings had been built to code," Barrett's final report said. "Instead, code violations were the reason for the failure of the buildings."

It went on: "If the building code is followed -- with requisite understanding of building science -- the building envelope systems will work."

Barrett's findings have been accepted as accurate and fair by most sectors of the industry, but have never sat well with home builders. Some still ask, how could the same people who built perfectly serviceable buildings in the 1970s suddenly lose it in the 1980s?

"The only thing they were doing differently was following the new order because they were told to," said Peter Simpson, chief executive of the Greater Vancouver Home Builders' Association.

"The new order" refers to changes in the building code in the late 1970s to mandate airtight walls in order to conserve energy -- in essence, to make sure that when you heat your home, the warm air doesn't constantly leak out through the walls.

"There was this blind pursuit of energy efficiency," Simpson said.

In his view, airtight walls meant that when water got in -- as it inevitably would, sooner or later -- it couldn't get out again. It was trapped in the walls, and the walls would rot.

The condo crisis generally occurred for buildings built between the early 1980s to the late '90s. Since then, condo design and construction has improved dramatically.

Buildings that continue to have issues with leaking have, for the most part, either taken time to show problems or have strata councils that have not taken appropriate action.

In general, the assessed value of problematic condos decreased significantly until the repairs were carried out. Remediated condos in the present local real estate market quickly catch up to market value.

The view that it was the code's fault has not been embraced by the courts.

In the hundreds of lawsuits filed by leaky condo owners, liability has stuck to builders, developers, architects, engineers, contractors, manufacturers and municipal governments to varying degrees. But no court has yet blamed either the provincial or the federal government.

An earlier class action suit against the B.C. government and CMHC was rejected by the Supreme Court of B.C. The suit claimed that by requiring the National Building Code to be adhered to when it insured mortgage loans, CMHC was promising the buildings would be structurally sound. The province shared blame because it was negligent in enacting the B.C. Building Code, which is based largely on the federal code.

Not so, the court ruled. CMHC was off the hook because mortgage loan insurance could not be interpreted as a warranty on the building. And the province had no special obligation to the plaintiffs.

Now, Cummins figures he has found the smoking gun that will finally convict the building code.

Cummins said he got involved because his riding had its share of leaky condos.

"Some of the stories you heard were pretty tragic," he recalls. Seniors looking forward to a carefree retirement lost their savings. Young families buying their first homes had to walk away from their mortgages.

He started asking questions and talking to condo owners who were convinced the federal government and its agencies were behind the problem.

"It seems at least part of the issue was the National Building Code," Cummins said.

He agreed there were design problems -- California design styles were popular, but didn't function well in the rainforest -- and shoddy construction.

"But underlying a lot of it was the National Building Code and the wet wall syndrome that could be associated with it."

Cummins started writing letters, asking questions in the House of Commons, filing freedom of information requests. What did the federal government and its agencies know about building problems, and what did they do about it?

"You dig away, dig away, dig away, and all of a sudden you come up with a gem."

Cummins found a series of memos, meeting minutes and letters, most of them dated 1981, focused on some CMHC-insured homes in Newfoundland whose walls were rotting, apparently due to condensation.

By August 1981, CMHC was taking a national survey to find out how widespread the problem was and whether building codes and standards needed to be changed, Cummins' research shows.

"Today's building energy standards which require tight air/vapour barriers," said one of the CMHC memos, "can result in higher relative humidity within the houses and a reversal of air flow through the exterior walls. In many houses, the outward flow of warm, wet air is condensing within the exterior walls.

"This condition demands early action by builders and homeowners, otherwise, early deterioration by rot of woodframe houses in Newfoundland, and most likely in other parts of Canada, will reach major proportions."

Letters were sent to the federal deputy energy minister and to provincial housing ministers. The topic was raised at a National Building Code committee meeting in Charlottetown. One of those present was B.C. government building official James Currie.

"Mr. Currie said that there are problems of condensation on the West Coast," the meeting minutes say. "He believed the problem was related to the need for adequate air supply" in the walls.

And then Cummins found his gem. "That's the deputy minister of energy telling a guy at CMHC, you've got this problem. But the government's position is that they have a commitment to the National Energy Program, and that's the priority. We're not interested in finding any fault with that program."

Soon after, the discussion dwindled away. "They just said, stifle it," Cummins said. "We don't want to hear any more. And that was the end of it."

CMHC should have admitted then that there was a problem and fixed the code, he said. Instead, "the problem got bigger. Out here, it was just an unmitigated disaster."

Cummins says this is all information that wasn't available to the Barrett commission.

James Currie emerged in the 1990s as a disgruntled former B.C. government employee who went public to say he had predicted the leaky condo disaster but had been ignored.

At the height of the crisis, his letters were circulated by the Home Builders' Association to back the contention that the code was part of the problem.

Currie refused to testify at the Barrett commission, but the commission heard expert testimony on his claims -- the testimony fills more than 100 pages in the commission's final report -- and dismissed them.

Cummins asked Conservative leader Stephen Harper during the last federal election campaign to call for a federal inquiry into leaky condos, and Harper publicly agreed to undertake "a review" but did not commit to any details.

Now that the Conservatives are in power, Cummins has asked Housing Minister Diane Finley to establish a judicial inquiry that would report back in nine months and determine "the extent of federal government liability and the nature of restitution and relief to homeowners."

He hasn't heard back from Finley yet. But he figures that if the government doesn't step up, the courts will eventually order it to do so.

"You might as well get ahead of the game and give these people some satisfaction before that happens."

The class action suit "is based on CMHC's involvement in the investigation of leaky buildings in Canada from 1981 to the present time," says Singleton, of the Vancouver law firm Singleton Urquhart, "and is based upon knowledge they gained in that time period, up to and particularly the late '80s, early '90s, and what they did and did not do with the information they had."

Singleton argues CMHC was negligent in failing to tell the industry what it knew -- "that this sort of design, particularly on the west coast of Canada, and this type of construction was going to fail and cause significant structural damage. That's our case."

He anticipates the Supreme Court of B.C. will hold a certification hearing in the fall. If it certifies the suit, hundreds if not thousands of condo owners are expected to join the action.

Singleton said the suit does not involve the building code. It is about "what CMHC knew or didn't know," and that was never presented to the Barrett commission, he added.

If the suit goes forward and he wins, any leaky condo owners who haven't settled their claims and agreed not to sue anyone else "would be able to then recover from CMHC their determined pro rata share of responsibility for the problem. And we don't know yet what that may be."

Not everyone agrees Cummins and Singleton are on the right track.

For one thing, the documents Cummins found point to condensation within the walls from moist indoor air as the source of the problem.

Pierre Gallant, an architect with building engineers Morrison Hershfield and a leading expert on building envelopes, notes the amount of water that can get into walls by condensation from indoor air is so small it is measured in grams.

What got into B.C.'s leaky buildings wasn't condensation but rainwater, in quantities measurable in kilograms, through numerous imperfections in the "face-sealed" outer walls.

It did not get in because of a faulty building code, Gallant said.

"Those who advocate this just don't get it. It's scapegoatism to blame the government."

What went wrong, Gallant said, was industry-wide.

"The designs were faulty because they did not conform to the minimum standards of the building code.

"The authorities having jurisdiction did not enforce the code because arguably they did not understand it as well they ought to.

"The developers and contractors did not build as per code because the designers did not design as per code.

"There was a gradual erosion of good construction practices because of the pressures of the economy. Land costs were so high, we wished to construct at a lower cost in order to provide a product to the eventual owners, and shortcuts were taken.

"Windows started to leak, so the manufacturing was inadequate.

"So you can see it's an industry-wide problem. Every player in the industry from the installer to the manufacturer to the designer to the developer to the funders to the authorities in jurisdiction, had a role to play."

The sealed walls were supposed to keep water out, Gallant said. "Recognizing that nothing is perfect, whatever gets by the outer cladding must be intercepted and allowed to weep out. Our building code since its earliest beginning described just that."

Gallant said the code is widely misunderstood. It is not the law of the land, but a model code that describes how buildings are built in Canada. It does not prescribe how buildings should be built. "It is reactive, not proactive."

For example, virtually all B.C. condo buildings are now built with rain screens. But the national code didn't call for rain screens until last year, and the B.C. Building Code won't require rain screens until next year.

Gallant wasn't aware of the details of Cummins' documents or Singleton's suit, but he said CMHC is generally open with its research results.

"I have never seen an attempt [by CMHC] at hiding information," he said. "But let the courts decide."


Leaky condo loan approvals show late 1980s to mid 1990s was the worst period for leaky condo construction.

Year of con- Number of Percent struction buildings of total

1997 6 0.96%
1996 15 2.39%
1995 32 5.10%
1994 90 14.35%
1993 78 12.44%
1992 60 9.57%
1991 42 6.70%
1990 52 8.29%
1989 47 7.50%
1988 40 6.38%
1987 27 4.31%
1986 27 4.31%
1985 28 4.47%
1984 18 2.87%
Before 1984 65 10.37%
Total 627
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Re: More Condo woes in Alberta 2012/03/03 17:33  
Condo owners stuck with $2.2M repair bill
CBC News
Posted: Jul 13, 2011

Residents of a downtown Edmonton condominium believe better provincial regulations could have prevented them from having to pay $2.2 million to fix problems they say were caused by the developer.

The owners of decade-old Rossdale Court condominiums have spent the last four years fixing problems with pedways, balconies and window seals which are related to water leakage.

"It is pretty disheartening," said Lynn Yakoweshen with the Rossdale Court Condo Association.

"I bought in this building because it's a beautiful location, it's a wonderful neighbourhood, a great sense of community ... like kind of an isolated oasis, Unfortunately if you look around it hasn't been quite the oasis that I had hoped."

The owners of the building's 69 units have each spent between $28,000 to $40,000 on repairs, Yakoweshen said. The balconies needed restoration work and the building's exterior stucco had to be completely replaced.

Rossdale Court was built in 2001.

"All of your savings are depleted," she said. "We're very loathe to open emails because you wonder, 'what now?'"

Liberal MLA Laurie Blakeman blamed the provincial government for the situation. She said building codes are insufficient and fines too low to be a deterrent. She said the current one-year warranty period doesn't help homeowners.

"Most problems turn up at the five, six-year mark and there's no protection for that," she said.

The province plans to take measures which include increasing fines for building code offences but Blakeman said the province hasn't set a timeline for when those changes will come into effect.

The Rossdale Court condo owners say they have had no luck suing the developer. Yakoweshen said the building was built under a company name that no longer exists.

"We have no legal recourse," she said.

Blair Hallet is the developer of Rossdale Court and Glenora Gates, another condominium now under repair because of water leakage problems.

Hallet could not be reached for comment Wednesday. A staff member at Tessco, where Hallet is listed as a director, said he now lives in British Columbia.
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Re: Olympics condo nightmare 2012/03/05 22:27  
A $1.8-million Olympic Village dream turns sour
Gary Mason
Published on Friday, Mar. 25, 2011

When Helen Lee and her husband bought a place in Vancouver’s Olympic Village back in 2007, it was still being built. But a gold-medal sales pitch compelled the couple to fork out $1.8-million for an 11th-floor, 1,475-square-foot condo with expansive mountain and water views.

“It was going to be our dream home,” Ms. Lee remembers.

Four years later, the couple’s dream has officially turned into a nightmare. And they are not the only Village dwellers being kept awake at night by homeowner horror stories.

The Lees are among more than 60 condo owners at the Village who have filed a class-action lawsuit demanding their money back. It couldn’t come at a worse time for the city of Vancouver, which had to take over the project in 2009 and had recently launched a new sales campaign in an attempt to recoup some of its money.

Now the disgruntled homeowners have gone public with a disturbing video documenting a litany of problems, including water pouring out of light fixtures, heat not working, cracks in ceilings, hardwood floors that are bubbling because of moisture and bedrooms that are too small to fit a bed.

“One of our bathroom doors opens out into the hallway,” Ms. Lee told me. “I have two children who run back and forth in front of it and they have been hit by the door. Our floors are wrecked. We’ve had no heat for two months. The flex space we were promised is half the size.”

The Lees, I’m sure, would love to find a way to get their money back. They, like most of the others involved in the lawsuit, bought at the top of the market. Condo marketer Bob Rennie recently slashed prices by as much as 30 per cent in a campaign designed to ignite stalled sales. But who would buy in the Village now with owners producing documentary evidence suggesting the workmanship in the project is wanting?

Glitches in new condominium projects aren’t uncommon. A legal representative for the sales companies selling the Olympic Village condos earlier played down the condo problems and suggested the lawsuit has more to do with a drop in the value of the units themselves. When the real estate market goes down, said lawyer George Macintosh, buyers look for ways to have their sales cancelled.

But the Olympic Village was supposed to be a one-of-a-kind wonder built to the highest environmental and construction standards in the world. The project’s troubled developer, Millennium Development Corp., was reported to have spared no expense during construction.

But like so much about the Olympic Village, it appears to be a contentious claim.

Of course, the small print of every real estate deal includes the words “buyer beware.” And this one was no different. So there are many people who don’t feel a bit sorry for the aggrieved owners. Many figure they’re just looking for a way out because they paid too much to get in – especially compared to their new neighbours.

But this case is a little different.

Most condo owners have someone to go after when things go wrong – like the developer. But Millennium went into default. The project is in the hands of a receiver, although technically the city of Vancouver really owns the project. It is selling the condos through shell companies. But think about it: The warranty for the heating and plumbing systems – which have experienced huge problems – expires next June. After that, there will be no one for the residents to go after if they have problems because they bought from a shell.

Bryan Baynham is the lawyer representing the angry condo owners. He said his clients have an ongoing “right of rescission” under consumer protection legislation on the grounds they were misrepresented when they purchased their units.

“The law is meant to cover situations like this where you have nobody to turn to, to remedy or get relief from your problems,” Mr. Baynham explained.

His clients represent about a third of the original group of buyers who gobbled up 240 units when the project was still being built. He estimates it would cost the city of Vancouver in the neighbourhood of $50-million if it were to refund the owners’ money. It could probably recoup 75 per cent of that amount after it fixed the problems and put the units back on the market.
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Re: Olympics condo nightmare 2012/03/05 23:35  
It was also just as easy to throw together a 200 unit subdivision, with leaking basments, bad roofs, under-powered furnances, no insulation, no grading, no lawns, sidewalks or even roads and skip town with the money. Even been to Alton?

The warranties and protections, if any came late or didn't survive, in Vancouver. Hopefully we are ahead, in Ontario. Little has hit a court, yet!

The million dollar price tag was not an indicator of quality, in beautiful Vancouver.
Richard Forster
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Re: Nova Scotia condos also have their troubles 2012/03/07 11:26  
Door slammed in condo group's face
Published on Febuary 15th, 2008
Staff ~ Halifax News Net

A group of disgruntled condominium owners now has another reason to be angry.

Members of Condominium Owners of Nova Scotia are already unhappy over what they say is the shoddy construction of some buildings. Like houses, condos are a major investment. When owners find themselves forking over large sums of cash to pay for repairs, and discover the company that erected the building has legally disappeared, they're bound to start asking questions. And their persistence in seeking answers is understandable.

Late last year, the province announced it would establish a steering committee that would look into construction practices. The committee would consist of both provincial and municipal employees.

The province planned to hire a consultant as well. Service Nova Scotia and Municipal Relations Minister Jamie Muir said the consultant would "analyze (condo owners') concerns and ... research best practices, and also to recommend steps that should be taken."

Liberal MLA Diana Whalen and Rockingham-Wentworth Coun. Debbie Hum supported efforts to alleviate the effects of poor construction.

Now, the group has run into a roadblock.

Members hoped to share some of their findings on inspection-process problems with Halifax regional council. But that's not going to happen.

The owners' group received an e-mail from HRM deputy chief administrative officer Wayne Anstey saying the presentation to council will not be allowed. Anstey said it was "presumptuous" for owners to "assume the problems encountered by homeowners have come from a failure of our inspections program."

Anstey also said the city prefers not to interfere with the province's review process. But the city is part of that process. The steering committee the province created includes municipal employees.

Condominium Owners of Nova Scotia has legitimate concerns that need to be addressed. Councillors should be the ones to judge whether the group's presentation is "presumptuous."

So there is shoddy construction of new condos and the city does not want condo owners pointing fingers at their inspectors. How short-sighted.
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Re: Buying a condo in the States? Be careful 2012/03/08 10:58  
How Bad Are Arizona Condo Conversions?
Blog: Arizona Sucks

Looking at the current situation we are in here in Arizona, it is hard to believe that just a few years back houses could not be built quick enough out here. People were ready to buy and many homes were selling before they even hit the market. It was during this time that apartment conversions skyrocketed in the Phoenix area to try and keep up with demand, especially in areas like Scottsdale.

It is certainly much easier, as well as a great deal cheaper, to take these preexisting apartments and drop in a few upgrades, instead of building from the ground all the way up. Transforming former Arizona apartments into so-called condos also allowed you to make the most out of older apartments that are located in areas which are seen as more desirable.

You can charge quite a bit more for real estate that is more centrally located in the Phoenix area, as opposed to all the new builds way out in Buckeye or Apache Junction. Sure the location might be great and these newly named condos might look super nice when you first step inside, even though the outside of most still screams trashy apartment, but are they really a wise buy for your money?

Looks can surely be deceiving and this could not be any more apparent than when it comes to most of these Arizona condo conversions. It was imperative that these Arizona condo conversions were done quickly, cheaply, and efficiently in order to maximize profits before the market turned – if not, you would be the one taking the financial hit when Arizona’s housing market went south.

So, how much time, effort, and cash was actually put into the majority of these recent conversions? Well, it’s not that hard to rip out the brown or green 1970s appliances and replace them with new, bottom of the line stainless steel appliances. Add cheap, knockoff granite counter tops and update some of the archaic light fixtures and you have already made the place look a thousand times better while keeping your costs extremely low.

Now just repaint the aging walls and replace the stained carpet with the cheapest tile you can find, and you have successfully finished your Arizona condo conversion. This is reality – most Arizona condo conversions consist of not much more than new paint, appliances, lighting fixtures, and flooring.

The motto and underlying sales tactic for anyone trying to sell you one of these properties is, when in doubt or questioned about anything, rave about the resort like pool. A number of these Arizona conversions spent a significant portion of the cash set aside for the conversion on upgrading the pool area. Many added new palm trees, maybe some tiki torches, and newer bamboo chairs and umbrellas. Some spent a fair amount on resurfacing the old pool, while others did nothing except for making things appear better than they actually are.

Don’t be fooled – how much time do you think you will actually be at the pool anyways and don’t forget you are sharing this pool with all your loud, drunk, disease ridden, meth dealing neighbors.

Before you even consider buying one of these properties, you must remember that many of these units were sold without consideration for the future of the community or its residents – this is not a planned community, it is essentially a get rich and get out scheme.

HOA fees (condo fees) are often absurdly high to ensure maximum profit for those part of the conversion process – funds in the HOA capital reserve for potential large expenses such as pool maintenance and roofing repairs are pretty much non-existent until you have owners regularly paying their dues. But, remember most of these properties were sold when the housing market was at its peak and everything was way overpriced. Many have since been foreclosed on or have renters who are paying extremely low rent, and many units still sit vacant because most were picked up as investments. When you rely on HOA funds for general maintenance, pool upkeep, and other community repairs with so many units in foreclosure, you really have an issue on your hand.

A number of these condos also suffer from being poorly managed and developed since these old apartments were purchased to get them on the market as quickly and cheaply as possible. If you still plan on purchasing an Arizona condo conversion, make sure you know exactly what your monthly dues are, what they cover, and how the reserve funds are handled.

Are there are condo conversions that might be worth looking at in Arizona? Sure, there might be, but good luck finding them. Be warned, most of these Arizona condo conversions are the equivalent of a cheap paint job – it might look nice the first few weeks but will quickly show just how imperfect it is. And unlike the apartment it once was, you can’t just terminate your mortgage like you could with that lease.

You are still living with paper thin walls, aging and possibly deteriorating plumbing and electrical lines which are often overlooked since they are hidden from view, and usually a thoughtless design and layout inside your unit and that of the entire community.

Save your money and buy a real condo or a house or just avoid the mess of Arizona real estate all together.
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Re: Buying a condo in the States? Be careful 2012/03/08 11:10  
50 different states, countless counties, so anything can happen,in the what's in it for me, US.
Richard Forster
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