The dangers of being a property leaseholder combined with an affordable housing crisis are creating a perfect storm for dozens of residents at a modest condo development in Richmond.
Many of the seniors and lower-income families at 6420 Buswell St. fear they may soon be on the street if they can’t come up with the $40,000/unit their landlord is demanding for repair work on the building’s exterior.
Earlier this month, tensions were high as people gathered in the hallway awaiting a meeting to discuss the high envelope costs (expected to total $2,150,000) on the leasehold building, which was built in the 1970s.
One resident, Simon Chen, said he didn’t realize his nightmare had just begun when he purchased his home several years ago from Westpark Investments. Ltd.
Chen told the Richmond News that residents started receiving letters from the landowner this October. According to the letter, each leaseholder is required to pay around $40,000 for the repair project, although the payments may vary depending on condo sizes.
A following letter said leaseholders who couldn’t provide a lump sum could make 24 or 48 equal monthly payments at six per cent interest. However, that still doesn’t works for Chen or many of the other residents.
“If I choose to pay the bill within 48 months, I still need to come up with an extra $1,000 each month. Most residents are struggling to make a living, not to mention pay an additional $1,000 each month,” said Chen.
Another resident, Daniel Chen, 80, noted that the landowner never consulted with them before moving forward with the project.
“Lots of families are stricken by these letters, we feel a sense of anger and helplessness,” said Daniel. “I came across another 80-year-old senior in the elevator this month; she told me she’d rather die than pay the money.”
Another resident, Therese, who didn’t want to give her last name, said she was born in the building 30 years ago, but now she is concerned she might be kicked out if she fails to make a full payment.
“We are in the middle of a housing affordability crisis in this city. I am worried my sister and I are going to end up living on the street.”
Reading the lease carefully
Despite the hardship being caused, the landowner has the legal right to do what it’s doing — such are the pitfalls of leasehold agreements.
Leasehold means the buyer owns the house or condo but not the land it’s built on. When it comes to determining what repairs are done to the building’s exterior and communal areas, and who is financially responsible for those repairs, there are no over-arching regulations. It all depends on the specific contract — something leaseholders often don’t understand.
“When it comes to leasehold properties, probably 99 per cent of people don’t read their contract. This is a document that can either make or break your life,” said Mark Wiens, a Richmond-based realtor.
“A lot of times, the way lease contracts are written, they’re not very fair to the buyer; there are a lot of risks,” he added.
No law to protect leaseholders
During the past few weeks, Daniel Chen has done lots of research online, looking for legislation that could protect him and his neighbours, but couldn’t find anything.
On the political front, leaders are sympathetic to the residents’ plight but are hesitant to champion their cause. Richmond city councillor Linda McPhail said although she is concerned, this issue is beyond council’s control.
MLA Jas Johal said the residents are not in his riding. MLA Linda Reid, whose riding the residents do live in, offered no comment.
Meanwhile, the Ministry of Municipal Affairs and Housing said they understand the situation is difficult, and the province is taking steps to inform buyers about potential risks. However, “residents of these buildings are governed by private contracts with the building owner and disputes are handled through the courts under common and contract law.”
Although, none of this helps the Buswell residents, Chen remains hopeful as the group looks for legal aid and support on grounds of compassion.