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Leaseholders in Vancouver building in panic as monthly fees triple

The leaseholders, who are mostly fixed-income seniors, have been hit hard by the sudden notice of major maintenance costs and the short amount of time in which they had to come up with the money

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Leaseholders at a building in Vancouver’s West End have been in a panic over a sudden notice of major maintenance costs that tripled their monthly fees.

“There are a lot of seniors in this building and it was advertised and deemed, as all leaseholds are, as an affordable form of housing and contracts were signed in good faith,” said resident Ken Lychak.

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He added that many seniors who live on low or fixed incomes are being rocked by the assessment and the short amount of time in which they had to come up with the money.

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“It’s created a sense of panic and desperation. Some are going to be forced to sell or face bankruptcy.”

About six weeks ago, the private owner of El Cid tower, a 193-unit, 27 storey tower on Comox Street that was built in 1968, issued to leaseholders a notice of a special assessment of $25,000 for each unit, due in monthly payments at the beginning of March.

The residents, who have been paying operating fees of about $800 a month, had to submit 12 post-dated cheques for another $2,200 a month and were told there will be several more large assessments like this in the next three years.

The situation has them joining other low- or fixed-income leaseholders at other buildings who are also facing hikes in fees and pressing to fill what they say is a gap in oversight.

Owners of these leaseholds basically paid a lump sum to an owner or landlord that is a multi-year, pre paid form of rent that allows them to live in the unit for the duration of the lease, which is usually a term of up to 99 years.

Most of the leasehold contracts started in 1974 and came into being after fair rent controls were legislated. A small group of rental apartment owners balked and instead sold their apartments as 99-year lease units in order to sidestep rent controls.

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Unlike strata property owners and other long-term renters, the private contracts or leases that govern these leasehold arrangements don’t fall under any legislation or any provisions of the Residential Tenancy Act.

Overall, it’s a relatively small number. According to the province, there are only about 20 buildings with such leasehold arrangements and they shouldn’t be confused with other leasehold arrangements where strata owners and the strata own the building, but not the underlying land on which it’s built.

Nevertheless, these 20 buildings do account for some 2,000 units of housing for about 4,000 residents and have, for decades, served as a much more affordable housing option.

El Cid resident Ron Fisher said the Housing Ministry’s strategy for affordable housing should include regulations for their time-limited form of home ownership.

The problem is that the owner of the building has the sole authority to make all decisions including monthly maintenance fees, timing and scope of building improvement projects, rules about parking, decisions approving or denying access to common areas, and allowing resident committees to meet with management, he wrote.

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Leaseholders can only turn to the courts to resolve small and large disputes. But they’re wary of doing this, since the landlords charge back legal fees to the building as an operating expense that must be paid by leaseholders.

“The increase in legal fees for many leasehold buildings have more than doubled in most buildings with my building’s increase being over $200,000 compared to two years ago, of only $80,000,” wrote Fisher.

It may be that increased costs and fees are justified, he said, but as these have more sharply risen by 40 per cent since COVID-19, there is more of a need for transparency in this case.

The premier’s liaison for renters, Spencer Chandra Herbert, said in a statement that the Housing Ministry is “listening to the issues long-term residential leaseholders face. Ministry staff are monitoring this issue, including relevant court decisions, and will continue to explore additional avenues to expand protections for potential buyers and leaseholders.

“People, especially seniors on fixed incomes, deserve to feel safe and secure in their homes. That’s why I will be leading an engagement process later this spring to better understand the concerns of long-term residential leaseholders and assess possible measures to expand protections for affected individuals.”

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