Discovery Bay (Kelowna): City declares Discovery Bay condos unsafe for occupancy
Discovery Bay Unsafe
June 30, 2006 / 5:02 pm
Pointe of View Developments advised the City of Kelowna today that a report dated June 30, 2006 from David C. Woodall Structural Engineering Ltd. has determined that the 232 condominium units known as Discovery Bay, at 1088 Sunset Drive, should not be occupied until the buildings have been reinforced and are in compliance with the BC Building Code.
The wording in the report states %u201CWe (David C. Woodall Structural Engineering Ltd.) must conclude therefore that the wood framed buildings at Discovery Bay are structurally unsafe and should not be occupied until they have been reinforced and in compliance with the British Columbia Building Code in all respects.%u201D
This report is the result of inspections carried out on eight suites on June 14th and 15th, 2006. Access openings were cut in each of the suites to inspect wall studs, posts, beams, lintels and significant framing details. Preliminary findings outlined in a report dated March 6, 2006 indicated several areas of the wood framing appeared to lack sufficient strength. The June inspections confirmed concerns with load bearing stud walls and the lack of wind and earthquake resistance in the wood-framed structures.
Based on the information provided by the professional engineer retained by the developer in this case, the City is advising owners and occupiers of the safety issue. Mayor Shepherd, City Manager Ron Mattiussi and Inspection Services Manager Ron Dickinson met with strata council representatives this afternoon to advise them of the lastest finding. City Bylaw Enforcement staff and strata council representatives are hand delivering notices to all residents this afternoon. All owners will be advised by letter. The Strata Council is holding a meeting for residents and owners at 7:00 p.m. tonight at the Grand Okanagan Lakefront Resort and Conference Centre.
Pointe of View Developments and their structural engineer are now working on short and long term remedial actions to ensure the buildings can meet the requirements of the BC Building Code.
Although the City has no direct statutory authority to evacuate residents, we are recommending that the residents abide by the advice of the structural engineers.
Residents and owners are advised to contact their personal insurer and the National Home Warranty Program.
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Link: Discovery Bay Website Link: John Thomson on Discovery Bay in February |
Case Studies, Discovery Bay (Kelowna):City of Kelowna warns condos unsafe
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Discovery Bay Update - 1088 Sunset Drive |
||
Jun. 30, 2006 | ||
Pointe of View Developments advised the City of Kelowna today that a
report dated June 30, 2006 from David C. Woodall Structural Engineering
Ltd. has determined that the 232 condominium units known as Discovery
Bay, at 1088 Sunset Drive, should not be occupied until the buildings
have been reinforced and are in compliance with the BC Building Code. The wording in the report states "We (David C. Woodall Structural Engineering Ltd.) must conclude therefore that the wood framed buildings at Discovery Bay are structurally unsafe and should not be occupied until they have been reinforced and in compliance with the British Columbia Building Code in all respects." This report is the result of inspections carried out on eight suites on June 14th and 15th, 2006. Access openings were cut in each of the suites to inspect wall studs, posts, beams, lintels and significant framing details. Preliminary findings outlined in a report dated March 6, 2006 indicated several areas of the wood framing appeared to lack sufficient strength. The June inspections confirmed concerns with load bearing stud walls and the lack of wind and earthquake resistance in the wood-framed structures. Based on the information provided by the professional engineer retained by the developer in this case, the City is advising owners and occupiers of the safety issue. Mayor Shepherd, City Manager Ron Mattiussi and Inspection Services Manager Ron Dickinson met with strata council representatives this afternoon to advise them of the latest finding. City Bylaw Enforcement staff and strata council representatives are hand delivering notices to all residents this afternoon. All owners will be advised by letter. The Strata Council is holding a meeting for residents and owners at 7:00 p.m. tonight at the Grand Okanagan Lakefront Resort and Conference Centre. Pointe of View Developments and their structural engineer are now working on short and long term remedial actions to ensure the buildings can meet the requirements of the BC Building Code. Although the City has no direct statutory authority to evacuate residents, we are recommending that the residents abide by the advice of the structural engineers. Residents and owners are advised to contact their personal insurer and the National Home Warranty Program. -30-
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Class Action: Owners claim developer understated common expenses
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Condo buyers' class-action suit bears watching |
A group of unhappy condominium owners has commenced a class action against the developer of their Thornhill condominium project, claiming that the common expenses shown in the sales materials were significantly understated. Between 1999 and 2002, Cantertrot Investments (an H&R project) was marketing condominium units in The Residence of Beauclaire, on New Westminster Dr., in Thornhill. Before entering into the agreements, purchasers received a flyer indicating that maintenance fees for the units were "estimated at $0.32 per square foot," including utilities, visitor parking, concierge and one locker. Before signing agreements, the purchasers also received a disclosure statement as required under the Condominium Act. The statement indicated that $413,000 were the "total funds required" to be contributed by all owners in the form of common expenses during the first year following registration of the condominium. Based on the proposed budget and the draft condominium declaration, monthly common expenses for units in the project would range from $171.42 to $421.65, depending on unit size. The condominium declaration was registered on June 28, 2002 and, by law, the developer was responsible for any shortfall between the proposed budget and the actual budget for the first year of operation. A year later, the new board of directors reviewed the finances of the building and had no choice but to approve a budget showing increases of more than 62 per cent in common expenses for the second year of operation. Even after the increase, the new budget implemented a deficit of $48,000, which was funded by a special assessment of about $15 per unit each month for four years. In 2004, a group of the original purchasers retained Samuel Marr and Vadim Kats, of the Toronto law firm, Landy Marr LLP (http://www.landymarr.com), to launch an intended class action against the developer, its principals and the real estate brokers involved in marketing the condominium units. In order to start a class action in Ontario, a judge must be satisfied that certain tests are met and the legal proceedings would be more efficient if handled under one umbrella rather than having dozens of individual plaintiffs each commence their own lawsuits. After months of legal manoeuvring by both sides, Superior Court Justice Maurice C. Cullity recently certified the action as a class proceeding, allowing it to proceed with two plaintiffs — Solly Lewis and Hersl Kalif — representing themselves and those with similar interests. Irvin Schein and Stephen C. Nadler, of Toronto's Minden Gross, are representing the developer, and have applied for permission to appeal Cullity's certification order. The allegations in the claim of the plaintiffs are that, as a result of the alleged understatement of common expenses, the original buyers from Cantertrot suffered increased maintenance fees after the condominium's first year, loss of the services that had to be cut back to keep the budget in line, and diminished property values. The plaintiffs' case against the developer and its principals is based on alleged negligence, misrepresentation, breach of the Condominium Act, oppression and other legal grounds. They claim that the marketing materials and disclosure statements were "inaccurate, false, deceptive and misleading." In their claim, the plaintiffs allege that before the purchasers closed their transactions, and before the registration of the declaration, the developer was warned in writing by the property manger "that unless drastic adjustments are made, the second-year budget will likely be doubled." The defendants, of course, dispute the allegations. The trial of the case — if it gets that far — is a long way off, and none of the plaintiffs' claims have yet been proven in court. Materials filed in court last year on one of several appearances before Cullity show that 120 plaintiff unit owners are claiming damages of $10,572 to $12,643 for smaller units, and $26,004 to $31,101 for larger units. The damages are based on two expert reports, and have yet to be tested at trial. The total loss claimed by the class members is in a range of $2.1 million to $2.5 million. Experts retained by the defendants, on the other hand, have estimated that the total losses of the buyers would be between zero and $52,300. Obviously one class action, where the issues and facts are all similar, is preferable to the enormous costs of 120 separate Superior Court actions, where some of the damages might fall within the $10,000 Small Claims Court jurisdiction. Unless the matter is settled earlier, a trial of the action could well be two or more years into the future. For condominium builders and owners, it will be a fascinating case to watch as it unfolds. Bob Aaron is a Toronto real estate lawyer. He can be reached by email at bob@aaron.ca, phone 416-364-9366 or fax 416-364-3818. Visit the column archives at http://www.aaron.ca. |
Case Studies, Spinnaker West: Illegal budget, leaks and rot
Dear
Mary,
Your
leaky rotten condo complex, Spinnaker West – 2368 Laurel St. - has adopted an
illegal Budget for its 2006-2007 fiscal year, as it did the year
previous.
The
Statement of Income and Expenses 2005-2006 and the proposed Budget for 2006-2007
distributed just prior to the (late) AGM of June 7, 2006, included a line item
called “Maintenance: Extraordinary”.
The
Budget amount for this item April 2005 - March 2006 was
$1,000.
The
Actual amount expended was $5,091.90 being $4,091.90 over
budget.
It is my
opinion that the Strata Corporation records as distributed to the Owners do not
provide an adequate explanation as to what the money was spent
on.
It is my
opinion that the Property Manager (Ann Hedley of Realacorp - who holds a
temporary license to provide
strata management services and who has not taken the required course nor passed
the required examination) together with the Strata Council were not authorized
by the Owners to over-spend the budgeted amount, which should not have been in
the Budget in the first place.
It is my
opinion that the line item “Maintenance: Extraordinary” is ultra vires the Strata Property
Act, which states:
Operating fund
and contingency reserve fund
92 To meet its expenses the strata
corporation must establish, and the owners must contribute, by means of strata
fees, to
(a) an operating fund for common expenses
that usually occur either once a year or more often than once a year,
and
(b) a contingency reserve fund for common
expenses that usually occur less often than once a year or that do not usually
occur.
…
Expenditures from
contingency reserve fund
96 The strata corporation must not spend
money from the contingency reserve fund unless the expenditure
is
(a) consistent with the purposes of the
fund as set out in section 92 (b), and
(b) first approved by a resolution passed
by a 3/4 vote at an annual or special general meeting, or authorized under
section 98.
Expenditures from
operating fund
97 The strata corporation must not spend
money from the operating fund unless the expenditure is
(a) consistent with the purposes of the
fund as set out in section 92 (a), and
(b) first approved by a resolution passed
by a 3/4 vote at an annual or special general meeting, or
authorized
(i) in the budget, or
(ii) under section 98 or 104
(3).
Unapproved
expenditures
98 (1) If a proposed expenditure has not
been put forward for approval in the budget or at an annual or special general
meeting, the strata corporation may only make the expenditure in accordance with
this section.
(2) Subject to subsection (3), the
expenditure may be made out of the operating fund if the expenditure, together
with all other unapproved expenditures, whether of the same type or not, that
were made under this subsection in the same fiscal year, is
(a) less than the amount set out in the
bylaws, or
(b) if the bylaws are silent as to the
amount, less than $2 000 or 5% of the total contribution to the operating fund
for the current year, whichever is less.
(3) The expenditure may be made out of the
operating fund or contingency reserve fund if there are reasonable grounds to
believe that an immediate expenditure is necessary to ensure safety or prevent
significant loss or damage, whether physical or otherwise.
(4) A bylaw setting out an amount for the
purposes of subsection (2) (a) may set out further conditions for, or
limitations on, any expenditures under that provision.
(5) Any expenditure under subsection (3)
must not exceed the minimum amount needed to ensure safety or prevent
significant loss or damage.
(6) The strata corporation must inform
owners as soon as feasible about any expenditure made under
subsection (3).
The
Strata Corporation Minutes of the 2006 AGM held on June 7 show that Otto
Folprecht and Glen Harris moved and the Owners approved a motion “That the
Extraordinary Maintenance category be increased [from $2,000] to
$20,000.”
In my
opinion the motion was clearly “out of order” and should not have been
considered at the meeting, which was chaired by Clive Boulton. Apparently several lawyers who were present
raised no objection to the Owners passing a motion ultra vires the Act.
Also,
contrary to the Act, you were not
provided with a schedule showing your proportionate share of the Budget, with
and without inclusion of the illegal
$20,000.
In other
words, 15 days later, you are still in the dark as to the amount of your annual
strata fees, which, because of the illegal budget, will now be considerably more
than the previous year.
Yet
another year has passed under the continuing illusion of progress and false
promises at Spinnaker West.
More
tarps and clear plastic have been added to the roof area.
Your
condo still leaks and rots.
The
drywall in your kitchen is soggy and falls to the floor in larger and larger
chunks.
The cost
of repairs continues to climb enormously.
And yet
the Owners of the Strata Corporation have still not resolved to fulfill their
statutory obligation to repair the leaky rotten common property, despite having
received several expert professional reports over several years prescribing the
conversion from face-seal to rain-screen technology, the building envelope
standard in Vancouver since 1996.
I am
quite certain the other residential owners (Boulton, Lavajac, Hamilton,
Harris/Hennsler-Harris, Reeves/Rykman and Folprecht) would have had the building
fixed years ago if their interior walls were as soggy and rotten as the ones in
your leaky condo.
And the
rot goes on, and on, and on ….
My very
best personal regards,
Dr. James
Balderson, Ph.D., Q.S.
COLCO: The
Coalition of Leaky Condo Owners
www.myleakycondo.com
JamesBalderson@myleakycondo.com
Owners of new condos in new phases must pay for leaks and rot in older condos
IN THE SUPREME COURT OF BRITISH COLUMBIA
Citation: |
Terry v. The Owners, Strata Plan LMS 2153, |
|
2006 BCSC 950 |
Date: 20060621
Docket: L051805
Registry: Vancouver
Between:
Lorne Terry
Petitioner
And
The Owners, Strata Plan LMS 2153, The Century Group
General Partnership and Kimberly Stubbs
Respondents
Before: The Honourable Mr. Justice Bauman
Reasons for Judgment
Counsel for the Petitioner |
F. E. Verhoeven and |
Counsel for the Respondent, The Owners, Strata Plan LMS 2153 |
V. P. Franco |
Counsel for the Respondent, The Century Group General Partnership |
H. S. MacDonald |
Counsel for the Respondent, Kimberly Stubbs |
T. A. M. Peters |
Date and Place of Trial/Hearing: |
1, 2 and 3 May 2006 |
|
Vancouver, B.C. |
I
[1] This petition raises again an issue between owners concerning responsibility for costly repairs to "leaky condos" within a strata plan.
[2] It is a contest all too familiar in the lower mainland of British Columbia and in its various iterations, it has produced much jurisprudence.
[3] Many of the cases see the conflict between owners of different types of units within a single strata plan, for example, townhouse owners versus apartment owners; new unit owners versus heritage unit owners; and residential owners versus commercial owners.
[4] The nuance which presents here sees the owners of two buildings in a phased strata plan resisting responsibility for costly repairs to two other buildings in the earlier phase of the plan. They do so by invoking the provisions of s. 164 of the Strata Property Act, S.B.C. 1998, c. 43:
Preventing or remedying unfair acts
164 (1) On application of an owner or tenant, the Supreme Court may make any interim or final order it considers necessary to prevent or remedy a significantly unfair
(a) action or threatened action by, or decision of, the strata corporation, including the council, in relation to the owner or tenant, or
(b) exercise of voting rights by a person who holds 50% or more of the votes, including proxies, at an annual or special general meeting.
(2) For the purposes of subsection (1), the court may
(a) direct or prohibit an act of the strata corporation, the council, or the person who holds 50% or more of the votes,
(b) vary a transaction or resolution, and
(c) regulate the conduct of the strata corporation's future affairs.
[5] These owners complain that the imposition of a proposed special levy to fund the cost of the repairs is "significantly unfair" in the circumstances which I will now describe.
II
[6] The strata corporation consists of four multiple family residential buildings in Richmond collectively know as "Victoria Park".
[7] The buildings are known as the Elgin, the Empress, Zenia 1 and Zenia 2. They comprise in total 302 residential dwelling units.
[8] The development proceeded as a phased strata plan under the provisions of the Condominium Act, R.S.B.C. 1996, c. 64 and latterly, the Strata Property Act, S.B.C. 1998, c. 43.
[9] The Elgin and the Empress were developed in 1995 as Phase 1 of the project. The owner/builder was Barbican Developments Ltd. ("Barbican").
[10] Phase 2, consisting of Zenia 1, was constructed in 2002. The owner/developer at this point was The Century Group General Partnership, which included Barbican and others.
[11] The Elgin and the Empress were occupied in 1996.
[12] The first strata lot in Phase 2 was sold on 28 April 2002. The remaining strata lots within this phase were sold in the months between April 2002 and March 2003. The Phase 2 strata plan was registered in the Land Title Office on 10 November 2003.
[13] The first strata lot in Phase 3 - Zenia 2 - was sold on 7 June 2002 and the remaining lots were sold in the months between June 2002 and March 2004. The strata plan for Phase 3 was registered on 23 July 2004.
[14] I attach as Schedule I to these reasons, a copy of the strata plan which conveniently identifies the phases and the buildings within them.
[15] Soon after Phase 1 was completed, the owners noticed some problems with water ingress into portions of the buildings.
[16] An engineering firm was retained by the strata corporation. A number of deficiencies were identified and the developer carried out some repairs.
[17] Further water ingress problems surfaced and in 1999, the strata council engaged the engineering firm, McArthur Vantell Ltd. ("MVL") to prepare a report. That report ("MVL #1") was issued on 15 September 1999.
[18] It is critical to the position advanced by the owners within Phases 2 and 3 to consider, as I relate the chronology, what the pre Phases 2 and 3 strata council knew of the water ingress problem, and when it knew it.
[19] MVL #1 focussed on problematic areas around windows and balconies. A moisture probe analysis showed dangerously high readings in some areas. The report recommended repairs to windows, vinyl siding, several balconies and further investigations. No budget was presented.
[20] One could characterize the approach recommended by the authors of MVL #1 as one calling for targeted repairs, rather than a full scale remediation of the two buildings within Phase 1.
[21] Upon receipt of the report, the strata council took a number of steps. They are summarized in Mr. Terry's Affidavit #2 at paragraph 2 so:
(a) repairing the area of investigation on the 8100 building;
(b) asking McArthur Vantell to provide specifications for repair of the area of investigation on the 8080 building;
(c) asking McArthur Vantell to provide a summary of the larger water ingress investigation required and a quotation for the cost of such investigations;
(d) sending a letter to the original developer, Barbican Properties, (the "Developer") noting these decisions and stating that the repairs were the Developer's responsibility; and
(e) submitting a claim to New Home Warranty.
[22] These repairs were pursued in 2000 and 2001.
[23] On 17 May 2000, MVL produced its second report ("MVL #2). According to its terms "The primary focus of this investigation was the balconies and exterior walls clad in vinyl siding as recommended in the Moisture Investigation Report dated September 15th, 1999 %u2026".
[24] The report concentrated, in part, on the window areas of the two buildings:
The areas that were tested around suite 102, the leaking hall window and the Bay-windows are believed to have similar window detail problems as suite 106, (refer to the MVL moisture ingress report, dated September 23rd 1999 for more details). The window trims and flashings are suspected to have been poorly installed and are a probable source of moisture infiltration. This opportunity may be compounded by inadequate roof over-hangs and insufficient cladding waterproofing details. The areas that are most severely affected are window/wall areas with no roof over-hangs.
We recommend repairs of the building envelope be carried out on all the windows as soon as possible, which should include the removal of vinyl and wood siding, to determine the source of moisture ingress and condition of the substrate. All deteriorated sheathing and framing should be identified and repaired, with the wall cladding system rebuilt to current standards. The details should include but not necessarily be limited to the following items: caulked joints and membrane back-up at all penetrations, membranes and saddle flashings at all saddle points, membranes under all cap flashings, and a drained cavity wall system (complying with City of Richmond Requirements.
[25] The authors recommended, as a first step in this process, that three mock-up locations be selected and "reworked to determine the appropriate repairs, including waterproofing details".
[26] This table summarizes the report's recommendations:
Summary of Recommendations
The Table below summarizes the above recommendations in terms of cost (not including GST).
priority and schedule.
# |
RECOMMENDED ACTION |
QTY |
UNIT COST |
BUDGET COST |
PRIORITY and SCHEDULE |
1 |
3 Mock-up areas Contingency for Mock-ups(15%) |
1 N/A |
$27,000 N/A |
$27,000$8,100 |
first |
|
MVL Consulting Fees for Mock-ups |
1 |
$5,000 |
$5,000 |
year 2000 |
|
Sub-Total |
|
|
$41,000 |
|
2 |
Guard wall repair |
18 |
$1,000 |
$18,000 |
2000 |
|
Guard wall Contingency (15%) |
N/A |
N/A |
$5,400 |
|
|
Sub-Total |
|
|
$23,400 |
2000 |
3 |
Eaves trough |
130 |
N/A |
$7,280 |
2001 |