$29-million condo project facing $40-million repair bill City says leaking development at Broadway and Nanaimo is in danger of failing structurally

By Fiona Anderson and Glenn Bohn, Vancouver Sun

Published: Saturday, September 16, 2006

Owners in a leaky condominium project that cost $29 million to build in 1994 may now have to pony up a total of $40 million to keep the buildings standing.

The City of Vancouver ordered Gardenia Villa, at the corner of Nanaimo and East Broadway, to get an engineer’s report after an inspection showed various parts of the complex were at risk of failing structurally. The city also ordered immediate shoring to one of the buildings in the complex because of imminent danger.

Normally, it’s the strata council that decides to get an engineering report done and the city doesn’t get involved until there is an application for a building permit to do the work, Vancouver’s chief building official, Dave Jackson, said in an interview. But in this case, some of the owners complained to the city that maintenance wasn’t being done.

Following an inspection, the city was concerned that the building “might be damaged to the point where something might fall,” Jackson said.

In its order, the city also referred to “water ... leaking out of structures in several locations and ... algae growing extensively on the building’s exterior stucco.”

The project, designed by architect James Cheng and developed by Hong Kong-based Maple Resources Investment Co. Ltd., is a colourful elevenbuilding complex with three gated courtyard gardens and a pool on five acres of land. Two of the buildings are concrete, but the other nine are wood-frame low-rises.

According to the report by RDH Building Engineering Ltd., 63 per cent of the owners of the wood-frame units that responded to a survey said they had problems with condensation, and 41 per cent had problems with mould, fungi or mildew. Forty per cent said their apartments had leaked within the last year.

Owners of the concrete units fared a bit better, with only 26 per cent reporting condensation and 16 per cent mould or fungi. Yet 32 per cent said their apartments leaked.

The owners met Tuesday and will meet again today to discuss what steps to take next. If they decide to go ahead with all the work recommended by RDH, the average cost per unit would work out to $160,000. When they were sold in the early 1990s, the two- and three-bedroom units went for between $149,900 and $345,900.

That’s money many of the elderly Chinese owners can’t afford, said Doris Choi, whose mother is one of the owners.

“If you are going to put in $160,000 you might as well move somewhere else and get a new [apartment],” Choi said. “Why would people pay that much money on an old house?”

But for now her mother, whose unit Choi says is problem-free, will be staying put.

“Because nobody’s going to buy the apartment and we can’t afford the extra money to get another one,” she said.

“It’s not fair for the homeowners,” Choi added. “How are they going to afford more money like that?”

Gladys Rivas, whose husband and two teenaged sons live in a clean and well-kept two-bedroom unit with a study in the complex, is bracing herself for what may happen next.
The Spanish-speaking family came to Canada from their native El Salvador about a dozen years ago. Rivas, a cook in a Vancouver restaurant, and her husband, a construction worker, bought the unit in 2004 for about $185,000.

A Vancouver Sun reporter invited into their home saw no telltale signs of water damage, and so far the family is unaware of any problems in their unit. That’s why Rivas doesn’t understand how she could be facing a repair bill that may turn out to be almost as much as the purchase price of her home.
“It’s crazy,” she said. “I cannot afford that much money. ... It’s like buying another apartment.”

Forty-year-old Howard Ng said he bought his two-bedroom apartment for about $115,000, so he doesn’t understand why the average person in the complex may be facing a bill of $160,000.

“I’m very disappointed,” Ng said in his native Cantonese. “My heart feels very uneasy.”

Options the owners will be considering today, according to a notice of the meeting, include doing nothing, proceeding with the repairs, suing the parties who designed and built Gardenia Villa, and dissolving the strata corporation and selling the land.

But legal action against the developer may prove difficult as Maple Resource Investments was dissolved in 2003 for not filing annual reports. And Jackson said doing nothing was also not an option.

“Ultimately, we expect them to do the repairs and if they don’t, we would eventually order them to,” Jackson said.

Once the strata does the repairs, the city will require letters from structural engineers to ensure it has taken care of the safety issues related to the structure, Jackson said. The city will also need letters from envelope specialists that repairs meet minimum standards of the Vancouver building code.

Tony Gioventu, executive director of the Condominium Home Owners’ Association would not talk specifically about the Gardenia Villa project. However, he did say other projects with large assessments have been able to spread the repairs over a number of years, “which eases the financial burden on the owners.”

Also, some owners may be eligible for interest-free loans from the Homeowner Protection Office, to help pay their share of an assessment.