Owners of condos in an aging building face $14 million in repairs. If they can’t pay their share, they risk losing their house.

The massive beige and brown flagstone condominium building that Wendy Thomas called Toronto’s northwest corner home for 42 years is falling apart.

She sees the warning signs in the streams of water that streak the hallway walls, bubbling behind the yellow paint and pooling on the worn carpet. Exposed wires hang from broken light fixtures in dark stairwells, and cracked lobby windows are held together with duct tape.

In his own second floor unit, a main pipe burst behind the shower nearly a year ago. The gushing water disintegrated sections of drywall and destroyed flooring throughout the unit.

The 72-year-old spent days cleaning water and months dealing with mold and mice until she could afford basic repairs, although the holes in the wall of her bathroom remain.

“I’m scared, you know, because we don’t know what the future holds,” Thomas said.

Her husband died in July, leaving her with only one fixed income. Then in September, everything got worse, she says.

Thomas says she asked the condo corporation to fix the walls damaged by a burst pipe nearly a year ago, but is still waiting. (Submitted by Wendy Thomas)

Up to $9 million in debt and a rapidly deteriorating structure have caught up with York Condominium Corporation No. 82, which manages the 321-unit building in the Jane and Finch neighborhood. And last week, an Ontario Superior Court judge cited an engineering report that said needed repairs to the 10-story building over the next year would cost more than $14 million.

Like all condominium corporations, this one is overseen by a small group of owners elected to a board of directors. They have the power under the Condominium Act of Ontario to require all owners to pay common expenses, regardless of the cost.

So that’s what they did.

On September 2, the company sent letters to all owners informing them that they had 15 days to pay a special assessment ranging from $30,000 to $42,500 per unit depending on its size – in addition to monthly maintenance fees. around $800.

The total of $11.2 million raised would be used to repay loans and reduce a list of 70 repairs ranging from replacing plumbing to upgrading elevators to restoring the party hall that has been closed for 15 years, says the letter.

If residents were unable to pay, a lien was imposed on their unit, which under the Condominium Act of Ontario allows the condominium corporation to sell the unit to recover the Amount. It also means that those residents cannot vote in future council elections.

“How could they do that? We’re in the middle of a pandemic,” Thomas said in tears. “For most people, this is their retirement home. They were looking for a quiet moment.”

Senior takes out a high interest loan

Residents did what they could to help improve the building, paying bills sent by the company to cover plumbing costs and false fire alarms, in addition to their monthly fees, Thomas said. Recently they were each charged $60 for new keys when the lobby doors were replaced.

They also no longer have security, a superintendent or cleaners, she said.

When she received the special assessment of $35,000 for her unit, Thomas approached her bank for a loan. However, she and other residents said the building was in such disrepair that no financial institution would lend them money.

Thomas then had no choice but to take out a high-interest loan from a private lender, she said. To pay the payments, she left retirement and returned to her customer service job.

Scaffolding blocks a section of the building’s lobby at 4645 Jane Street, where a persistent leak has damaged the ceiling and walls. (Samantha Beattie/CBC)

The situation is particularly bad, one of Toronto’s worst condominium lawyers, Jonathan Fine, says he has seen in his 35-year career. He reviewed documents including a reserve fund study and special assessment letters sent to residents and obtained by CBC News.

“It seems to me that the problems stem from being wise and being foolish – or not carrying out diligent and proper maintenance, repair and replacement,” he said. “Someone ignored what they needed to do over time.”

The collapse of the Champlain Towers in Surfside, Fla., which killed 98 people, is an extreme example of what can happen if older buildings aren’t properly maintained, Fine said.

CBC News contacted the company and its board of directors for this story, but did not receive a response. The company’s attorney also declined to comment.

Building in a “dangerous and dilapidated state”, according to a judge

However, an Ontario Superior Court decision last week reveals the extent of the damage and unsafe conditions and what led to the special assessment. A lawsuit has been filed by an investor who owns multiple units against the company for its recent handling of the situation.

The building, which is at least 50 years old, is in a “dangerous and dilapidated state”, with structural problems that need to be fixed immediately, such as flaws in the roof of the underground car park, cracks in the foundation and loose concrete on the balconies. , Judge William D. Black wrote in his decision.

A recent technical report estimated that the cost of needed repairs over the next year would exceed $14 million, Black said.

But society is broke. Last spring, he had just $1.75 in his reserve fund and $5,000 in his operating fund, the judge said.

A recent engineering report warned that many of the building’s balconies are unsafe and children should not be allowed to play on them. (Susan Reid/CBC)

He also pays $80,000 a month in interest only on existing debts, including $8 million borrowed from private lenders over the years for repairs and more than $1 million owed to the City of Toronto for fees. of fire, water, sewer and unpaid garbage collection, the decision mentioned. The city is also taking other actions against the company for violating the fire code.

The investor who filed the lawsuit was seeking a court order to compel the company to hold a meeting for residents to vote on the removal and replacement of the board of directors, according to the ruling. Some landlords are pushing the council to explore other options, such as allowing residents to pay their special dues in installments or take on more debt to meet the most urgent repairs.

But Black said that in such dire circumstances, any delay in resolving the issues would amount to “rearranging the deck chairs on the Titanic”, and ruled against the investor.

Majority of residents did not pay fees

Thomas is now worried about his neighbors because the majority of units, about 250 out of 321, have not paid, according to the court ruling. The company has promised not to enforce liens — and sell their units — until April.

“We don’t really know what the outcome will be,” Thomas said. “It was really difficult.”

Daphne Persaud says she has yet to pay her $35,000 special assessment fee and is hoping for a payment plan to ease the financial burden. (Samantha Beattie/CBC)

Daphne Persaud is among those still unsure of what to do after her requests to the company’s lawyer for a payment plan option went unanswered. There is now a lien on his property for $35,881 which includes interest and legal fees.

“We are in a disabled state,” Persaud said, pointing to a group of mostly elderly residents who had gathered outside Wednesday with faded orange signs reading “Stop Unfair Special Assessment.”

“We can’t afford it. It’s ridiculous.”

As a single mom, she bought her unit in the 1990s for $75,000 and has paid her maintenance fees every month since, even though they’ve gone from $300 to $900 over the years.

“We don’t get what we pay for,” Persaud said.

Condominium lawyer Audrey Loeb said owners’ options are limited. They could seek the appointment of an independent administrator, but that is expensive and they would probably come to the same conclusion as the company, or they could sell the land to a developer.

“My heart breaks for these people,” Loeb said. “They just can’t afford to be there.”

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