Vancouver strata told to impose $16m special levy
Keith Fraser
The Province
A judge has ordered a Vancouver strata to impose on the owners a $16.8-million special levy to repair long-standing leaky-condo problems.
Owners first noticed water issues at the Gardenia Villa, a 250-unit complex at Broadway and Nanaimo, shortly after it was built in 1994.
Drywall and carpets were soaked, walls and ceilings stained and condensation collected on window interiors. In some cases there was mould growth and failed window and door seals.
In 2005, the City of Vancouver ordered the strata corporation to take steps to remediate its failed building envelope after finding significant decay of structural members, water leaking out and algae growing extensively on the exterior stucco.
The strata did not implement an engineer’s report recommending a comprehensive remediation program, prompting a group of owners to go to court seeking an order for an administrator with powers to impose a special levy.
The judge in that first court case dismissed the petition after concluding that the complex’s salvage value — its expected sale price if bought by a developer for demolition and redevelopment — might be less than the then-estimated price of $40 million for repairs. He left open the possibility a similar application might succeed on new evidence.
“Notably, almost 10 years have elapsed since that petition and Gardenia Villa continues to face serious water-ingress problems,” said B.C. Supreme Court Justice Maria Morellato in her ruling ordering the $16-million levy.
Court heard that in March 2008, following the dismissal of the petition, the strata approved a $10-million levy. Some repair work was done, but the funds ran out in 2012 and a resolution for another levy to finish the work was defeated.
A 2013 engineer’s report that recommended further work was not acted upon and in 2014 a third report was prepared setting out various options for a levy, but the owners defeated each of five special resolutions, failing to get the needed 75-per-cent support for approval.
Frustrated by the delays, a group of owners filed another petition in B.C. Supreme Court against the strata corporation.
The strata admitted there was a dispute between factions that led to an inability to manage and govern the necessary repairs to common property and conceded that an administrator should be appointed to oversee the repairs, but they opposed the levy.
The petitioners argued that the “democratic deadlock” could not be resolved only by the appointment of an administrator due to the continuing conflict among competing groups of owners. The judge agreed that it wasn’t enough to just appoint an administrator and that a court-ordered levy was necessary.
“Further delay and further votes will not remedy the deadlock and may serve to exacerbate an already untenable situation,” she said.
The judge determined that a special levy of more than $16.8 million was needed to do the repairs. She also appointed Tony Gioventu, executive director of the Condominium Homeowners Association, as an administrator to ensure that the strata discharges its obligations.
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