Friday, July 16, 2010

You can't mediate the right to live in your home

Let's mediate whether
 you can live in your home
About a year into this saga, the lawyers for the condo board were writing lies about the leaks being our fault.  They wrote we had not installed a chimney on the main floor properly and that it was responsible for flooding all three floors and both ends of the condo.   Of course, the chimney and fireplace were without water traces but the board hired contractors to secretly remove the chimney and dispose of it so that no evidence could ever be brought to court.  Never mind that the chimney on the main floor might have trouble flooding two floors above!  I never said the lawyers representing the board were smart.

Today, that chimney is still missing and the chairman "has no idea where it is".  The board eventually admitted it was wrong and after two years it replaced the chimney last year (2009).   I guess that is the first step to admitting liability.

But the main point to this note is to summarize a chat that a board member had with us after an Annual General Meetings where our "situation" was discussed.  It was well-intentioned, I'm sure, and the owner-board member asked if we would participate in "mediating" our differences with the board--and he would act as mediator.   I was shocked and after some thought politely declined.    My view was that "mediating" with a party that is preventing you from living in your home is like mediating with a thief about returning your possessions.   It isn't right, it isn't legal and the situation needs to be fixed before anything like mediation happens.

You don't mediate the right to live in your home.   

If this condo board starts acting properly and repairs our home properly so we can move back then they can mediate the level of damages they owe us for three years of renting and all the hardship we've had to endure.  But, we're happy to let a judge figure it out because of the penalties and interest that will likely be applied.  We've got thousands of photos, all the board's emails, communication with the property manager and reports from the experts.   When the last two board members toured our damage they were surprised at the situation and complexity of events.   One said "I hope there isn't a test because there is so much detail I never knew".   That doesn't sound like a board that has any idea of what is going on.  Most have never seen the damage to our place that they have caused--yet our door isn't more than 100 feet from their front doors.

Trying to mediate something that is clearly the fault of the board demonstrates the ignorance and insensitivity of the group.   The right thing to do is admit the faults of Phase 1, fix the place completely as it was in 2006 and stop hurting people.   I'm almost certain none of the board as individuals would act carelessly and flagrantly but under the protection of a board of managers things are different.   After three years where the board has still not fixed our damage but has fixed all the neighbouring units just proves the board is either vengeful or just dysfunctional.  Given the money and contractors involved you can't rule out the possibility that someone is getting an unspoken benefit.  No matter what the motivation, the Condominium and Property Act of Alberta does not prevent it.   The judge and lawyers who work this case can't come to a reasonable decision on how to proceed and the insurance companies (ING, Co-operators) are completely useless and non-responsive.

If we lived in a house instead of a condominium people would be in jail or legal trouble for taking steps to damage someone's home.  Under the CPA, this body of directors can hide behind the Act and do little or nothing with virtually no immediate risk.   Trying to mediate out of this mistake is transparent and a signal that little thought is going into resolving this problem.

Monday, July 12, 2010

The Fallout from poor management

The evidence is now clear.   We have first-hand knowledge of real estate agents in Calgary who have told clients they either refuse to show property in our complex or try to dissuade potential buyers from plopping money down for a unit here.  This comes from having a bad reputation, not maintaining the property, high contribution fees compared to other neighbouring condominiums and a history of leaks that, in our case, only got worse after spending millions of dollars to fix.

A recent resident of our complex did a survey of contribution fees and determined that our complex has the highest fees for the least benefits.  That makes sense because so little has been done on the energy side to control costs since 1995, so much is spent on needless legal battles, contractors that that don't repair their mistakes leaving the insurer or owners to fund the fix.   This means all of the volunteer time is probably going to putting our fires, dealing with complaints, collecting from unhappy owners and other unproductive activities.

When owners aren't happy they sell.  When real estate agents stop people from buying here, prices fall.   The tax base erodes.  The complex becomes a statistical outlier and people ask "why".   The City of Calgary reported to us directly that our complex has had one of the worse declines in value because of the "problems" in our complex.   The news is out and the City and real estate agents know what is happening and knowledgeable buyers are being told to stay away.  

We heard from one resident who has viewed the declining state of the property for the last few years and wanted to sell.  But, when that owner saw the devalued prices it was a big surprise.   We've heard now from a few owners who have decided to stay and try and move the board off this destructive decline and try to turn the property around but that will likely take years and many more dollars of wasted money.

The result of bad decisions at the board level have now hurt owners, property prices and our reputation which will take years to fix.   The news is now driving away prospective buyers and has the attention of the City and Provincial governments.  

Friday, June 25, 2010

"Substantial Completion"

When a contractor does a large job there are progress payments and holdbacks until the job is certified as Substantially Complete. Contractors bidding on large jobs must buy insurance and pay for bonds and that is built into the price we pay.  In our case, a consultant can be hired to reconcile all the work and authorize payments.    If you have been reading this blog you'll understand that there might some question as to my belief that the work on our unit was satisfactory or that the contractors should have been paid.  Our unit accounted for 10% of the contract--more if you look at the square footage overall so it could be argued that "substantial completion" never occurred.  Although this insurance and performance bond was provided, the condo board never exercised it's right to call upon those instruments to rectify all the damage from Phase 1.   In one recent meeting (2009) a director remarked that "it is too difficult to go after these guys, it is easier just to pay to have it fixed".   The board left owners to absorb damage costs from contractors that it did not pursue through legal means, deductible costs on items that could be sloughed off onto the board's insurer (Co-operators) and it let owners like us pay our own costs because they knew we had no recourse if we wanted to live in our home.  "Home of Fiduciary Responsibility" is not a sign hanging on the board room wall.

Here is our window before Phase 1 started.  We had just renovated the interior.  This corner fireplace was added and the flooring was about to go in as the last step.  The wooden doors were painted in white trim to and the rooms were Elephant Tusk. It was a beautiful room.  Then Phase 1 came around to repair the exterior.

By the middle of the project, our windows coverings had been removed.  The casings were taken off and new windows replaced one or more times (don't ask why--it is a horror story and suitable for another day).   But, the new windows were a different size.  The window casings didn't fit and you can see in this shot how the smaller windows resulted in casings that don't fit the original opening.  This meant that everyone's window coverings would not fit and needed to be replaced.  The contract we paid for was supposed to handle these costs but the condo board didn't want to admit another mistake and simply told owners to "suck it up" and replace their own coverings at their cost.   The contractors, who bid on the contract specification, were able to perform this amateur installation, leave out important features and enrich themselves at our expense.  Once the contractors recognized that they could get away with small items they went "full tilt" and ignored the time schedule, cost targets, performed questionable work, left  out important contract items, failed to clean up the job site and ignored safety regulations.  Nobody on the board cared so why shouldn't a scum contractor care either?  It didn't.

It gets better.  This window was "finished" and signed off as "completed" in the regular reports that the board received.   I didn't believe it so we opened the casing and....

Not only was there no insulation in the area surrounding the frame.  These are supposed to be energy efficient windows but they left the cavity empty from the room straight to the outside wall.  The casing was set such that the roto hardware can't be turned without whacking knuckles.  Some windows didn't have the roto hardware so someone paid to have these windows cut open to install the latches and openers after the windows were fitted into the building.   Why would this happen?  Look at the next picture to see how they "screwed" this job.

The installation is strange according to every expert brought in to look.   The PVC frame is attached with screws into the frame on all four side and anchored with 1-inch angle on all four sides.   The window is hard mounted to the building frame with no float.  If the building contracts or moves with the seasons then these windows are going to twist and squeeze and get pulled.   This black "tape" stuff has only been explained in bizarre concepts.   The 40-50 screws into the PVC are unexplainable by anyone but they have destroyed the integrity of the PVC seal and we just lost about two inches of border.  I asked for drawings that should be part of the contract--zip.   I asked for drawings from the window manufacturer Starline and was told the installation does not match the company's generic drawings.

This is the way our "new" windows were left after $millions in cost.   "Substantial completion" was certified by the consultants despite arguments that monies should be held back for damage and repairs to our unit.   It didn't happen.   The contractor threatened to lien the premises, the board got wobbly knees and paid in full promising to fix our home but conveniently ignoring that for the next three years.   We have never seen a dime from that contractor or the fools who approved all this work.  They were all paid in full and over contract amounts despite continuing deficiencies to this day.  The board members remain "sympathetic" to our situation that they caused but haven't got the knowledge or the fortitude to insist that contractors make good on contracts and work quality.   The board is content to let owners suffer the results rather than doing the hard work and challenging contractors who are pros at scamming jobs like this.   Ten units were "repaired" for something around $3MM and our unit remains uninhabitable three years later.

The bigger question remains.    If our sample of windows revealed that there was no insulation and that they leak when tested properly then what does that say for the rest of the complex that was completed by the same contractor?  Statistically, are we the only ones out of the 100+ windows that didn't get installed fully and properly?   I can only say that when independent contractors wanted to remove windows for inspection they were fired.   When the Phase 1 contractor was to deliver a "mock up" of the window installation for reference, it was missing and never recovered.  When drawings for these windows above windows were requested, they were never produced.  It could all lead someone to think that this was a batch of poorly fitted windows, behind schedule, over budget so let's put them in, cover them up and hope nobody notices. I could be wrong.

Contractor: Silex, Vancouver.
Consulting Engineers: Morrison Hershfield, Calgary
Unhappy owner: me.

Wednesday, June 23, 2010

Government of Alberta Calling

Our MLA Kent Hehr asked for details on our situation.   He committed to write the Alberta Minister responsible for the Condo Act,  Hon. Heather Klimchuk and ask for changes to the Act to deal with the high handed nonsense dealt to us by this condo board.

Not surprising, I got a call from Services Alberta and they were asked by the Minister's office to get more details on our situation.  They had also reviewed this blog.   At the end of our call, the government representative summarized our board as "dysfunctional" and suggested a number of things we could do.   Ultimately, we were told that our experience is proof that the Act needs revision and our lessons would be a great addition for consideration of the next revision.

The summary at the end of this lengthy call was that the office had heard many horror stories "but this one has to be the worst".    I was told it was "illegal" for the board to withhold pertinent information prior to our purchase.    I was also informed that we are now "stakeholders" and will be interviewed for changes to the Act this coming spring based on our experiences.    The office asked for a copy of the letter I sent to owners outlining the lessons learned.    The representative corroborated many of the points in the letter including the need for "Term Limits" for board members which is something we do not have in our bylaws nor does the board entertain even informally.  Our board gives owners no options by resigning en masse at each AGM.  You must either re-elect them to provide continuity or take steps to find 7 new members out of 95 owners.  Tough situation and one that ends up with the same directors year after year.   Split the terms with limits is the answer.

From my call I learned that a condominium corporation "can be sued regarding any matter for which the owners are jointly liable." and the representative confirmed that the Statement of Claim filed is the right way to proceed against Prince's Island Estates.

We also confirmed that the corporation must obtain "insurance for any liability incurred by the board or corporation when carrying out their duties and responsibilities."  We believe the corporation has insurance to pay for our damage caused by the corporation's contractors but it refuses to discuss claims and repayment for more than two years now.  So, this is what we're stuck with:

We discussed the need for the Act to deal with all these deficiencies but the primary point I made was that the Act does not outline the primary right to live in your home with quiet enjoyment. I argued that renters have more rights and I am partially correct. The Act protects the board and gives the board many remedies but it does not protect owners or give them any remedy. Although mediation is an option in the Act, you cannot mediate the right to live in your home. The Act considers how to resolve damage or claim issues but leaves out the most important right of ownership. This fault gives the courts less latitude to resolve out-of-control situations like this one--our three year fight and two visits to the judge with little to show proves the Act is useless in these situations.

So, we are now the poster children for the need for revisions to the Act.

It's not the fall that hurts....

It's the landing that is painful.  You would think safety would be a high priority for a condo association especially when the City has already sent warnings.   Phase 1 was supposed to repair all of our decks because they exist over living areas and the draining systems go through walls which have been a problem since original construction.

Phase 1 did not repair our decks despite the millions of dollars spent.   I was familiar with the project at the time and I cannot recall seeing credits for all the work that was not completed.  It just went way over budget and it appears owners paid at least twice for the work.

Almost a year later, the decks were done at additional cost.  In fact, much of the work done in Phase 1 was ripped apart and repaired again.   It made no sense but we went through a second phase of work with more leaks from contractors and the board still refused to fix the damage.

When all the exterior work was done, the contractors put back the same old railing and it did not meet safety code.    You can see in the picture that the parapet in the background was removed from the foreground.   Water, dogs, tools, small children could now roll off the deck under that gap and fall three stories.  Of course, the mindless contractors didn't even have a building permit and the City stopped the work.  A building permit requires drawings and approvals for modifications so you can see how these guys keep trying to do things "cheaply" and end up spending multiples of what it would have cost with the right people and proper project management.

Eventually, these plexiglass temporary fixes were put in.  That was two years ago.   I'm not kidding, even the city inspector has retired while we wait for "drawings" to be produced by the condo board.  I've heard that excuse perhaps a dozen times now over the years.  But look at the plexiglass "fix".   The City inspectors permitted a plexiglass panel to stop kids from crawling under the railing but have allowed a step from which a youngster can now climb over top the railing and fall three floors.   This is the mess that develops when there is no plan and people try to make last-minute fixes.

Just recently, the new City of Calgary inspector called and arranged an inspection of the "temporary" railings this week.   It was reported that large gaps still exist large enough to violate Safety Codes so I'm hoping these things get fixed and made safe.

My summary is that the board permits sloppy work to continue on the premises.  Based on my experience it continuously fails to make contractors pay for damage, fails to insist that proper permitting and safety issues be followed and has no intention of making good on damage that it is clearly responsible for.

And, they just got re-appointed this month (June, 2010) for another year because nobody else wanted to run.  Hallelujah.

Monday, June 21, 2010

No end in sight yet

Earlier this month, a contractor with experience was brought in by our board to test the exterior decks and windows by using water to see if things would leak.  This was contrary to the last professionals who refused to use water because of the risk of damage.    We agreed with that assessment because we've had too much water damage already and the board has not paid for the problems it caused so why risk more damage?

It was rumoured that all of the units (our neighbours) in our building would be tested but that made little sense given the interior furnishings, ongoing habitation and possible damage.  Of course, our unit is partially gutted with no floor and we have people ready to open walls and ceilings if the board causes more water to infiltrate again.

My trusted interior contractor watched all the proceedings and tests.    A substantial test with water was performed on the new windows installed a few years ago.  A picture of the "professional" installation of the new windows is shown above.  Note the PVC frame is attached with metal screws into angle pieces that are attached to all four side of the window and attached to the building frame with no float.  If the building flexes then those frames are going to be under a complex set of loads.  The weird tape and goop and screws into the PVC frame have been described as "never seen before" by five firms who have viewed the installation.  The only firm to suggest the installation is perfect is the consulting firm that oversaw the project.   Surprise.

The decorative PVC white frame that should be the centerpiece of the window was left soiled as viewed, covered in this mystery tape.  Is it square?   When a square is placed on the frame it rocks on all four sides of the window frame.

I am told these windows failed which was no surprise since we could see air gaps and the windows let air in when latched.  Some latches were not even installed yet everyone was paid fully.   The water test was basically a waste of time and money as it only confirmed the windows leak.

We were told by the board chairman that any window that leaked will be replaced.   I doubt the board will live up to that commitment.  They will probably try to fix this on the cheap rather that fix what must be considered an unprofessional installation    This is not to say that Starline products are junk.  Probably they are acceptable in BC but they lack the specifications for Alberta winters according to installers who viewed the installation.  I can't imagine that the manufacturer will do anything to make this right since the frames are pierced, twisted and years old now.

On the other side of the condo we had Gienow windows that were supposed to be replaced years ago with this Phase 1 project but got missed.  The one year project ended up with old windows that will eventually have to be replaced.   You would think that a project of $3MM with 100 windows would not leave a few older ones un place but it did.  I am told these windows were tested and the seals were "blown out" so that they must now definitely be replaced.  That was a very useful test.

This unit, a Lux window, was installed by Phase 1 contractors.  It leaked and eventually broke one day without anyone's help.  You can see that date on the photo is May 2008.  It was installed in 2007.   It was only in September 2009 that the condo board stepped up to order another one.    It was February 2010 when it was installed and, amazingly, it was installed by Lux in such a manner that the The City of Calgary issued a stop work order until it was fixed properly.   Then, this past May it was re-installed for a third time.   Nope, still not correct.   I am told that Lux failed to install a pan gasket that would--get this--prevent water leaks.  A fourth try was performed this month June 2010, three years later and we're told it looks good this time.

Four times and 3 years to get a window properly installed.  Who's getting paid each time you might ask?  Good question.  Why are the same incompetents still running the show?   Another great question.

Our board has stopped talking to us for two weeks now.  We told them we wanted to work on the interior and after this "test" they stopped all communication.   What appeared to be movement forward has gone back to a legal mode.  No insurance issues have been dealt with, no response on these leaking windows has been forthcoming and PIE won't tell us what they are going to do, or when.   So, our interior remains at risk for 2010 until someone finds the ability to stroke an email or a cheque.

Why are the same people still in charge of this board project?  Good question.  I understand the entire board was re-elected or acclaimed this month.   Such stellar performance regarding our home certainly is a reason to be brought back for another year.

Wednesday, June 2, 2010

2010 Update

In early 2010 we were notified that the last repairs to the exterior were complete and the unit was ready for water testing.  Everyone agreed a water test made sense in order to close this file and assure everyone that there would no more problems in the future.   When the City of Calgary inspector viewed the board's repairs it issued a "stop work order" causing more delays.

By May, 2010, that problem was fixed and we are now hopeful that the end of this nightmare is near.   For reference, we filed a Statement of Claim which is public and remains unserved today while we await final repairs.

Lessons for Other Condominium Owners:  Now, we think there's a possibility of going home soon.  We learned so much about what can go wrong and to this day we still don't understand why this has been ongoing for years.  But here is a distilled list of things we believe condominium owners should know before someone starts working on the exterior of their home.

  • Fix it once, fix it properly.   It saves so much time and trouble later.
  • Hire paid Managers with the expertise to oversee large projects and be responsible for the results.
  • Your insurance could be absolutely worthless.
  • Do not rely on the Alberta Condominium Act to protect owners.  It only protects the board.
  • Elect a strong board with skills and proven knowledge in areas that are important.
  • Hire a professional property manager with credentials, insurance and a bond for performance.
  • Don't hesitate to seek counsel when you start to feel uncomfortable with the lack of progress.
  • Do not accept real or apparent conflicts of interest with contractors and your association
  • No building permit?  Call the City and ask.