According to a new Ontario Superior Court verdict, when condo costs more than doubled in a North York building, it triggered a heated dispute including legal threats, threatening e-mails, and conspiracy charges.
And now, the board of directors of the commercial units at the Emerald Park condo at Yonge and Sheppard Avenue is hoping that a new court order prohibiting harassment and threats will provide some relief — and allow them to investigate the surprise fee hikes that are common in many new builds in Ontario.
“It kept me awake at night. I couldn’t sleep,” said William Liu, a member of the board who says he was as surprised as anyone to see the fee hike in the first five years the building was open.
“One hundred thirteen percent on our unit is a lot. For example, my fees went from about $500 a month to about $1000 a month,” he said.
That was difficult for his storefront smartphone and electronics repair business. Others in the building, on the other hand, took it much harder.
A number of owners soon blamed the board for the financial troubles, according to the court verdict, sending several litigation threats, charges of corruption and “civil conspiracy,” and threatening e-mails.
According to another unit owner, Leo Papageorge, the tensions got in the way of truly addressing the reason for the steep fee hikes.
One said, “I will find you in Singapore, where you hide and drag you into my cold dark world.” “Obviously, it’s in all our common interests to get our fees to the level they should be at so that when you have someone who is throwing stones at people for nothing, it makes things ten times more difficult,” Papageorge said.
The problem of unexpectedly escalating condo rates isn’t exclusive to that complex. Many developers sold units using overstated amounts for condo fees in their initial budgets — and didn’t incorporate predicted expenses, according to an Ontario Auditor-General study released in 2020.
According to the data, approximately half of condo boards saw their costs increase by up to 30%. Around four out of ten boards saw it rise even higher. One out of every ten people had no idea.
At the time, the Auditor-General recommended that developers disclose more information about predicted increases in common area expenses, give condo boards more time to claim greater amounts, and learn from other jurisdictions’ best practises.
According to the report, developers in Nova Scotia and Newfoundland and Labrador must deposit money in trust for the condo corporation, while developers in British Columbia who understate expenses must pay a penalty that doubles if expenses are 10% higher and triples if expenses are 20% higher.
The Ontario government stated at the time that implementing those proposals would necessitate new legislation. The Ontario government is going through this procedure as it rewrites the Condo Act.
That should have been done a long time ago, according to Jessica Bell, the NDP’s Housing, Urban Planning, and Tenant Rights critic.
“The Auditor-General found very clearly there are many condo residents that are moving into buildings that face a sudden increase in condo fees because developers are systematically understating the condo fees at time of sale. That’s not fair. Condo residents deserve to know how much they’re going to pay to get a well-maintained building. They have rights,” she said.
One thing the government should do is compel a third party to examine the anticipated costs so that residents don’t have to trust the word of a developer who also wants to sell the building’s apartments.
At the Emerald Park complex, lawsuits are still pending to determine why the costs increased, and the condo board has hired a forensic auditor to investigate.
In this case, the judge imposed an order prohibiting condo unit owners from threatening or harassing Liu or other board members, which Liu claims is allowing him to sleep better at night.