A Victoria woman on the hook for thousands of dollars in service fees from her mother’s James Bay condo is in court fighting what could be a precedent-setting case on what kind of expenses a strata corporation can charge owners for.
“It’s unbelievable they think they can do this, but it’s happening and people don’t know better,” said Yvette Craig, 71, who inherited her mother’s condo in the Camelot building at 455 Kingston St.
Craig is being charged about $1,500 a month for meals, cleaning and other services she doesn’t receive at an apartment she doesn’t live in. She has refused to pay since May 2013 — she still pays the strata fees and property taxes — and said she is unable to sell the condo because of the attached service fees.
The Camelot strata corporation is taking Craig and another owner to court to enforce an amended bylaw that makes support service fees mandatory as a flat-fee part of the strata fees.
Craig said she hopes the courts rule the amended bylaw is not enforceable based on the fact that the Strata Property Act does not allow for a strata to charge fees for services beyond general maintenance of the building and common areas. She said these types of fees and services should be operated outside of the strata as a separate, standard-practice business.
“I’m hoping the judge will declare these kinds of bylaws are outside the scope of the strata act. I mean, how far can it go?” she said.
“It’s like McDonald’s buying up three-quarters of your building and charging everyone to only eat McDonald’s. You shouldn’t be able to do that.”
The building operates as an independent retirement home with support services. The majority of the units are owned by Nova Pacific, which runs several retirement buildings on the Island. Nova Pacific and its affiliated companies own 23 of 34 units in the Camelot, as well as the dining and kitchen facilities and guest-room areas. They manage the building, provide the services and have strata voting rights.
David English, chairman of the Camelot strata council, argues that the service fees are part of a contract every owner was made well aware of and agreed to.
“They are mandatory fees that were part of the agreement when everybody bought in. … We’re saying that because of the common good of the services, they could be classified as strata fees,” English said, adding the two owners in court are the only ones who don’t agree with the bylaw.
Jim Norman, Nova Pacific general manager, said that in 17 years, the service fees have not been a problem for owners, and noted that the building was developed to offer supports to seniors living there.
But Craig said others have protested and sold their condos for less than market value — including some to the management company — to get out of the service-fee contract.
Leilani White and her brother, Charles Rogerson, inherited an apartment at the Camelot in 2008 when their mother died.
White said they tried to find a renter or buyer for more than a year, but no one wanted to pay the attached service fees, and real estate agents eventually refused to show the place. In that time, the siblings paid $25,000 for services they did not receive.
“We said we’d be dining there a few times a week and were told no because we were not residents,” White said. “We ended up selling the apartment to them [Nova Pacific] for the rock-bottom price of $130,000. A two-bedroom corner condo in James Bay. It’s still painful to think about.”
(According to the Victoria Real Estate Board, the median sale price for condos in Greater Victoria in March was $278,000. A current listing on a Victoria real estate site lists a two-bedroom suite in the Camelot for $164,000, plus a monthly service fee of $1,403 for individuals and $2,098 for couples.)
White said her parents both had dementia and might not have understood the implications of the service-fee agreement when they bought into the condo building in the late 1990s.
“Our parents would have had a fit. It never would have crossed their minds this could happen,” White said. “But they signed it. We didn’t. And we still had to pay.”
Tony Gioventu, executive director of the Condominium Home Owners Association of B.C., said these kinds of retirement buildings with service-fee agreements can be problematic.
The Strata Property Act does not allow for bylaws that impose user fees on strata lots, Gioventu said.
“The fees are for use and maintenance of building facilities,” he said. “User fees are not lienable. Unless it is a strata fee or special levy, you don’t have to pay.”
Gioventu said the business of the strata corporation and any health care-type services should be kept separate.
“Companies are doing this because they are able to get away with it. It’s a concern in these kind of lifestyle communities where people purchase in. The business of health care gets intermingled with the strata corporation,” Gioventu said, adding it might be a better idea to rent in a building with support services rather than buy.
“Some seniors have a sense of wanting to own something, but it might be best to invest the principal and live off the interest,” he said, noting seniors are especially vulnerable to complicated agreements and tend not to file complaints. “Then you don’t leave your kids with these kinds of problems.”
If passed, amendments to the civil resolution tribunal system would require strata corporations to try to resolve disputes via an online tribunal before going to court. Gioventu said this could be particularly beneficial for those in disputes with large companies.
“The tribunal system will help in these kind of disputes. People won’t be forced to pay for fancy lawyers.”
