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A proposal to sell this Hamilton condo building, designated as a historic site, has been delayed due to social-isolation orders.

Glenn Lowson/The Globe and Mail

A controversial proposal to sell an entire Hamilton condominium building has been delayed amid concerns that a meeting of the owners to settle the matter would have violated provincial social isolation orders.

The delay is just the latest twist in a saga first reported in The Globe and Mail in February, that has pitted neighbour against neighbour and launched accusations of pressure tactics and threats amid a looming maintenance bill that runs into the millions of dollars.

Dr. Joy Ogunro, who lived in the building from 1986 with her mother (and inherited the unit when her mother died in 2017, but now lives in Barbados) says she has been suspicious of the plan and methods used to attempt to sell the building from the beginning. “All of these actions appear not to be in the interest of the owners," she said. "What is the rush?”

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In November, the three-person board of the 12 condo apartments at 35-43 Duke St., a row of heritage townhouses known as Sandyford Place, listed the downtown Hamilton building for sale on MLS with an asking price of $4.9-million. According to sales documents The Globe has reviewed, by December a tentative agreement of purchase and sale was struck with FortinoBros Holding Inc, a developer of boutique heritage condominium projects in Hamilton run by brothers Jordan and Eugenio Fortino. The sale price of $3.7-million would value each of the units at approximately $308,000, but the dissolution of the condo corporation would also mean the distribution of the reserve fund to members. A July, 2019, reserve fund study shows the fund stands at more than $460,000, which might add another $38,000 to unit owners.

That study also shows the need for a $2.85-million special assessment for repairs to everything from stonework to a steel balcony. Owners are legally on the hook to pay for reserve fund studies and the first bills were for the Sandyford owners – which could be as much as $20,000 a month until each owner pays more than $200,000 into the fund – are scheduled to begin going out on April 1.

Dr. Ogunro disputes whether the board had any right to list the building for sale without consulting the owners. She also says she wasn’t informed of the deal to buy the building, struck in December, until Feb. 11, after The Globe published its first story.

Dr. Ogunro said that a May, 2019, appraisal – which suggested a value of $1.125-million if the site were a vacant residential development site using 2018 comparable sales – was not shared with her until March. She compared the process as being less stringent than one would expect in a divorce proceeding, where both parties might obtain their own appraisals and jointly participate in the sale of property. “We’re all married together in a condominium,” she said. “We do not know what other offers were presented or if these are the highest or best offers.”

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The process the board is pursuing is known as section 124 of the Condominium Act, which allows for a corporation to dissolve itself and distribute the proceeds of a sale of all the units and the land the building sits on. It requires that 80 per cent of the owners agree to the sale and also that 80 per cent of any lenders or other stakeholders agree also.

On March 21, owners received a notice to attend a meeting at 2 p.m. on April 5 in the building’s rear parking lot for a vote (to be recorded by a show of hands) on the plan to sell the building and dissolve Wentworth Condominium Corporation Number 96, which manages it. Days later, on March 24, the province declared a state of emergency to deal with the coronavirus pandemic, limiting public gatherings of more than 50 people. By March 28, the province banned meetings larger than five people excepting only funerals and services for first responders.

Dr. Ogunro took part in a March 24 conference call between the individual condo owners in which she said one faction threatened to withhold their fees if the purchase deal was not supported. In the call, one owner, Christopher Moore, said he represented seven other owners – including condo board president Sam Nash and board member Chris Krnjeta – in backing the sale.

“Christopher Moore, made the declaration,” Dr. Ogunro said. “If the sale was not accepted seven owners would not pay another red cent towards the common elements of the building.”

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Mr. Moore did not respond to requests for comment, but in a follow-up email to owners he wrote: “If everyone is considerate … we could all accept the $3.7-million offer without dissent and each get our fair share. If we don’t get 80 per cent or more on the vote, it’s going to get ugly very quickly. And the end result will be that we sell anyway under court order – and we’ll all end up with much less.”

The remaining condo board member, Anna Procwat (who owns two units in the building with her husband, with a third unit owned by her brother) was not included in the group of seven.

Lawyer Denise Lash, of Lash Condo Law, said condo board directors face considerable financial threat in such matters. “There’s tremendous personal liability for the directors,” for refusing to collect fees the corporation needs, she said. “If you don’t collect it, and you don’t secure it, the board member could be personally liable.” Any owner who stops paying fees can be subject to a lien on the title of their unit, failure to pay that lien could result in the power of sale of their units.

According to Ms. Lash, if the board majority does not direct corporate counsel to file liens against delinquent unit holders, any owner in the corporation could apply to the courts for an administrator to take over the management of the building.

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“It is going to be messy if we don’t agree to this,” said John Clinton, one of the seven owners who agreed to the fee hold back. “It feels like putting a gun to your own head, because we can’t see another option. Could anything be more catastrophic than blowing your own [financial] brains out?”

“If we don’t sell this [building] the prospects of moving forward are so dire for us … it’s an astronomical amount of money,” Mr. Clinton said. “I don’t have the money myself, this is my last day of employment; I retire today.”

The board agreed on Monday to delay the meeting by 30 to 45 days, said Patrick Greco, corporate counsel for the condominium corporation and a lawyer with Shibley Righton LLP. The delay doesn’t solve the problem of the special assessment payments and it may exacerbate the tensions over the sale.

“If this sale, which the board believes to be one of, if not the last chance, falls through, they’ve got to move ahead and start collecting the money,” Mr. Greco said. “The problem is there may be owners who simply don’t have access to those funds. I’ve never dealt with a board or person that were this deep in arrears. These owners are in fairly extenuating circumstances."

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