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Condo Developer just screwed me...hard...
Gnome-Interruptus
Registered User regular
Registered User regular
Im a single guy that just bought his first home a couple of months ago. Its a condo that was converted from an apartment building in 2006. It is supposedly a Co-Op.
Part of having a condo in Edmonton AB is that the Condo has to have a reserve fund for emergency repairs. The reserve fund legally has to be upwards of $420,000. Apparently the developer was responsible for establishing the reserve fund. But now he is offering a single bedroom unit (he says is assessed @ $165,000) and another $135,000 for a grand total of $300,000. Which is still $120,000 short, and that single unit is way overpriced, considering I bought a unit in the building with 2 bedrooms and underground parking for $163,000.
He is also offering $3,000 for legal fees.
If we dont accept this deal, he is going to declare bankruptcy / fold his company, and we will have to sue him to recoup costs.
I need help fellow PA'ers to find applicable laws and regs in Edmonton Alberta Canada if at all possible, I will also be looking for stuff on my own..
I unfortunately cannot provide the name of the Developer as I have not been able to obtain it yet, right now all information is being filtered through the Board of Directors and the Management company.
Also of note, the unit that the developer is trying to throw into the deal is currently owned by one of the members of the board of directors, who is getting a property of "equal" value from the developer elsewhere.
:x :x :x
Part of having a condo in Edmonton AB is that the Condo has to have a reserve fund for emergency repairs. The reserve fund legally has to be upwards of $420,000. Apparently the developer was responsible for establishing the reserve fund. But now he is offering a single bedroom unit (he says is assessed @ $165,000) and another $135,000 for a grand total of $300,000. Which is still $120,000 short, and that single unit is way overpriced, considering I bought a unit in the building with 2 bedrooms and underground parking for $163,000.
He is also offering $3,000 for legal fees.
If we dont accept this deal, he is going to declare bankruptcy / fold his company, and we will have to sue him to recoup costs.
I need help fellow PA'ers to find applicable laws and regs in Edmonton Alberta Canada if at all possible, I will also be looking for stuff on my own..
I unfortunately cannot provide the name of the Developer as I have not been able to obtain it yet, right now all information is being filtered through the Board of Directors and the Management company.
Also of note, the unit that the developer is trying to throw into the deal is currently owned by one of the members of the board of directors, who is getting a property of "equal" value from the developer elsewhere.
:x :x :x
MWO: Adamski
Gnome-Interruptus on
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do not depend on a web forum for this sort of legal advice.
What's the problem, now?
The problem is the reserve fund, that has to be $419,000.00 at all times, any time that the fund dips below that mark, condo fees for every tennant in the building must be raised, or else 1-time fees will be levied to keep the reserve fund at the required minimum of $419,000.00.
The reserve fund currently sits at $0.00.
One of the people on the board of directors, who is responsible for the reserve fund, is trying to sell his unit to the developer, above cost, where the developer will then turn around and give us the same unit at the same overpriced cost as part of the settlement.
This also has a side benefit to the board member to be getting out of paying the one time fee or increased condo fee's to restock the reserve fund from the theoretical $300,000 settlement to the required $419,000 minimum.
They just took a big shit on everyone, and are trying to convince us they can wash it off with their urine.
Edit2: There is an emergency condo meeting taking place on 6/30. I just got notice yesterday on 6/25 and didnt get the agenda until today 6/26. We need a quorum of 2/3's of the owners to show up... assuming its not just a single owner of 2/3's that rents them all out and gets to vote for whatever he wants.
MWO: Adamski
Do you own this place or not?
I agree, it feels like a scam, when one of the Board of Directors and the Developer seem to be in collusion to rip everyone off.
MWO: Adamski
Also, do you physically live in this building right now?
Yep, I am a resident owner.
MWO: Adamski
As other's have said talk to a Lawyer.
Do make sure to prepare for the worst, tho. The world is full of developers who get in over their heads and leave a big mess behind. Given some of the experiences I’ve had with awful developers (imagine your situation, except the entire building is falling apart) I’ll never buy a home of any kind from a small business.
You're doing the right thing by being proactive about it, but you need to talk to an attorney in the flesh. In fact, once you have hired an attorney, have him notify the contractor/board fo directors immediately and have him present at the 06/30 meeting if possible.
My spider senses always start to tingle whenever one party offers another party what amounts to being a bad deal in liu of bankruptcy.
Bring him to the meeting, make sure there's no duping or illegal moves being taken on the developer's part...that board member deal sounds very suspect (I'm a mortgage guy, not a real estate attorney, but I work with them every day)
He should be on the hook for this. But on that note, how in the hell did the condo pass bank approval if he didn't have the reserve fund set up?
And why does the reserve fund have to be $420,000? Shouldn't it be scaled based on the size of the condo project?
I'm sorry to say, it may look like you have a lawsuit on your hands, but the good news is you can all have one attorney to handle it for the group. The other good news is that since it's a condo and not a co-op, having the developer go under won't cause you to lose your interest in the property. It may cause you higher maintenance fees in the interim, but that's about it.
Well I'm in Edmonton if free beer makes you feel any better. Least I can do.
I believe the books of the Condo association should be available to any prospective buyer who asks. And all prospective buyers should ask. I have no idea what your avenue for reparations is now. I'd even call the police to see if a criminal investigation is warranted.
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