Sudden 113 per cent spike in Toronto condo fees sparks nasty dispute and threats #housingcrash

TORONTO -- When condo fees more than doubled in a North York building, it sparked a nasty dispute involving legal threats, frightening e-mails, and accusations of a conspiracy, according to a new Ontario Superior Court judgment.

And now the board of the commercial units at the Emerald Park condo at Yonge Street and Sheppard Avenue is hoping a new court order against harassment and threats will give some relief — and allow them to get to the bottom of the surprise fee hikes that are common to many new builds in Ontario.

"It kept me awake at night. I couldn't sleep," said William Liu, a member of the board who says he was as surprised as anyone to see the fee hike in the first five years the building was open.

"One hundred thirteen percent on our unit is a lot. For example, my fees went from about $500 a month to about $1000 a month," he said.

That was tough for his business, a storefront smartphone and technology repair firm. But others in the building took it worse.

Soon, the court judgment says, a group of owners blamed the board for the financial problems, issuing multiple lawsuit threats, accusations of corruption and something called "civil conspiracy," and frightening e-mails.

One said, "I will find you in Singapore, where you hide and drag you into my cold dark world."

The tensions got in the way of actually tackling the reason the fees hiked so much, said another unit owner, Leo Papageorge.

"Obviously, it's in all our common interests to get our fees to the level they should be at so that when you have someone who is throwing stones at people for nothing, it makes things ten times more difficult," Papageorge said.

The issue of suddenly rising condo fees is not limited to that building. An Ontario Auditor-General's report in 2020 found many developers had sold units using understated amounts for condo fees in their initial budgets — and didn't include expected expenses.

A survey in the report found about half of condo boards saw their fees go up by up to 30 per cent. Around four in 10 boards saw it increase more than that. One in 10 didn't know.

At the time, the Auditor-General recommended that the developers provide additional disclosure of expected increases to common area expenses, give condo boards more time to claim increased amounts and borrow best practices from other jurisdictions.

In Nova Scotia and Newfoundland and Labrador, the developer must put money in trust to be available to the condo corporation, the report says, and in B.C., developers that understate expenses have to pay a penalty that doubles if expenses are 10 per cent higher or triples if expenses are 20 per cent higher.

"There are no similar provisions in Ontario," the report says.

At the time, the Ontario government said following those recommendations would require more legislation. That's a process the Ontario government is going through as it revamps the Condo Act.

That should have been done long ago, said NDP MPP Jessica Bell, who is the critic for Housing, Urban Planning and Tenant Rights.

"The Auditor-General found very clearly there are many condo residents that are moving into buildings that face a sudden increase in condo fees because developers are systematically understating the condo fees at time of sale. That's not fair. Condo residents deserve to know how much they're going to pay to get a well-maintained building. They have rights," she said.

One thing the government should do is require a third party to analyze the expected expenses so that residents aren't taking the word of a developer who is also interested in selling the units in the building.

Lawsuits continue at the Emerald Park building, seeking to discover exactly why the fees went up, with the condo board engaging a forensic auditor.

The judge, in this case, issued an injunction saying the condo unit owners can't threaten or harass Liu or other board members, something Liu says is helping him sleep at night again.