Spadina Condominium Corporation provided notice to unit owners via email on December 5th, 2024, that the Annual General Meeting for the fiscal year ending June 30th, 2024 would be held on December 19th, 2024. No documents essential to an Annual General Meeting including financial statements were provided with this notice as required by the Condominium Property Act as follows:
Section 7.20 Mailing of Financial Statements A copy of the financial statement and auditor’s report shall be sent to each unit owner and first mortgagee entitled to vote by personal delivery or by prepaid mail not less than 14 days nor more than 50 days before the date of the annual meeting.
AGM meeting documents would only be provided to unit owners a few days prior to the AGM, precluding unit owners of sufficient time for reasonable review of audited financial statements. Unit owners have valid reason for concern. The following questions are deserving of response from the Board of Directors who were unable to provide response at the AGM:
- Why did the Board not provide unit owners with an explanation as to their silence and failure to provide unit owners with an explanation for the delay of the AGM, well beyond the June 30th, 2024 year end?
- Why were audited financial statements not provided by the auditor to SCC until December 5th, 2024?
- The Chairman’s first comments at the AGM advised unit owners of a conflicting GST issue among board members. Unfortunately, Mr. Beckman would advise that the matter was “very complicated” and was not prepared to provide any details. Why would Mr. Beckman refuse to explain a serious taxation issue that may have unknown consequences upon unit owners? The AGM was advised that the treasurer, Jeff Barns, resigned as a director over this issue. Unit owners have good reason to be concerned and deserve an explanation.
- Mr. Beckman advised the meeting that given the complexity of the GST matter, legal and auditor counsel has been sought by the Corporation. What costs (both auditor and legal fees) have been incurred by the Corporation as of the current date?
Why is SCC involved with any such GST issue when SCC (as a non profit corporation) sells no product or service, receives no sales or service revenue, and is therefore not required to collect GST from anyone? SCC simply requires that all unit owners, including the commercial owner, contribute to SCC their proportionate share of the Corporation’s expenses. There is no sales revenue collected by SCC, but only collection of the commercial owner’s proportionate share of SCC expenses. The commercial owner must simply claim the GST included in their proportionate share of expenses paid to SCC as an input credit on their GST filed return. The GST is easily determined by simply referring to the amount of GST included in SCC vendor invoices. The commercial owner then in turn simply collects from their tenants this proportionate share of the SCC expenses and GST.
Without any information provided to unit owners by SCC, It would appear that there is no need for SCC to have become involved in this totally unnecessary GST issue. Given the unknown facts of this matter and the potential impact upon resident unit owners, an immediate explanation of this matter is requested of the Board. Why does an amount relating to GST appear on the balance sheet as an account receivable and an account payable as well?
- The owner of 402 requested a review of the Reserve Fund Budget. The Reserve Fund Study called for repair to the deck of unit 402 in 2025 and was included in the 2023 Reserve Fund Report. Why does it not appear in the current reserve fund report? The issue of address to the replacement of the problem surface area of the outdoor deck of unit 402 was brought to the attention of the board. The owner has repeatedly requested address of this matter for many years. Prior to the owner’s purchase of the unit in 1995, leakage into the 3rd floor was alleged to have been caused by leakage from the 4th floor concrete deck. As a result, the entire concrete deck of unit 402 was removed including the insulation and the waterproofing membrane. Rather than repouring the concrete as recommended by a reputable contractor Haid Construction, SCC insisted on a cheaper option to simply lay in place 2×3 foot paving blocks. No such expenditure was ever approved by the unit owners. This resulted in an uneven surface and drainage became an issue. At the AGM, the chairman made a most ridiculous allegation that the current owner installed the paving blocks. SCC must remove the paving blocks and repour the entire deck. A new carpet cannot be installed until this is done. The repour must be conducted in 2025 as per the Reserve Fund Study and as noted in the 2023 Reserve Fund Report.
There has been uneven settlement of the paving blocks over the years and has resulted in failure of proper drainage due to the uneven pavers. There are also cracks appearing between paving blocks. This poses a risk of leakage into the unit below and should be corrected as soon as possible.
The reserve fund study of 2020 clearly required address of the 4th floor deck within the fiscal year ending June 30th, 2025. The board and unit owners acknowledged and approved the reserve fund study including this expenditure.
The owner has for many years waited upon the Corporation to address this issue and is hereby requesting that a poured concrete surface to the deck of unit 402 be installed in 2025 as per the Reserve Fund Study.
It is most important to note that it was later determined that there was never a fault in the original concrete surface of the deck of unit 402 and no leakage was ever caused by the concrete deck to the unit below. It was discovered that there was a leak in a water line within a concrete block wall between the decks of units 401 and 402 causing leakage into the unit below. The entire concrete deck of unit 402 had in fact been unnecessarily removed due to a totally false diagnosis of the leakage.
The owner has made numerous requests of SCC to address the matter with a repour of the concrete surface of the deck of unit 402. The owner is obviously unable to replace the covering of the deck until such time as the concrete surface is replaced. Brunsden & Associates who conducted the reserve fund study in 2020, advised with inclusion in their report, as approved by the unit owners, that replacement of the deck be conducted in the year ending June 30th, 2025. The chairman is now advising that SCC refuses to acknowledge the problem and their responsibility to address the matter which obviously requires immediate address. At the 2024 AGM, Mr. Beckman advised the meeting that any further attempt of the owner of unit 402 to seek address to this issue will not be recognized and that the only option available to the owner is to take legal action against the Corporation. It is most unfortunate that the chairman of our Board of Directors, rather than finally addressing this long outstanding issue, simply advises that the Board will not respect the requirements of the Reserve Fund Study nor the 2023 reserve fund budget but simply advises that the owner must pursue the matter with a court action. The owner requests that the board provide this position to the owner in writing.
The AGM chairman refused to review each component of the financial statements which is standard procedure at an AGM. Accounts receivable, while not referenced by Mr. Beckman, include the claim of SCC against the owner of unit 402 for costs incurred to address issues in unit 402 in 2021 conducted without the knowledge of the owner. The chairman rejected the owner’s attempt to advise the meeting that the claim of SCC (an account receivable of SCC) is subject to a material counterclaim which has not been disclosed in the financial statements. The owner further advised that the tenant of unit 402 has offered to pay the contractor invoices claimed by SCC.
- The issue of concern over the condition of sprinklers was brought up at the AGM. Unit owners were advised at the AGM of the three sprinkler incidents in the building, the first two in 1996 and 2011. It was noted that the building had a live in caretaker at the time of these incidents enabling the water to be shut off in less than ten minutes. Damages resulting from each incident were approximately $35,000.
On March 14th, 2021, a sprinkler was activated in unit 803. Unknown to residents, the new caretaker did not reside in the building and was called by the fire department to immediately attend the building with a key to open the water room and turn the water supply off. Residents gravely concerned and stressed, were forced to wait for more than half an hour for the caretaker to arrive and enable entry by the fire department to the water room. This information is confirmed within the written report of the Saskatoon Fire Department.
Unlike the first two sprinkler incidents where the live in caretaker was present and the water turned off in less than ten minutes, at 3:00 AM on March 14th, 2021, residents learned for the first time that we in fact did not have a live in caretaker to turn the water off. The fire department had to wait for the caretaker to arrive with the key to the water room. As a result the water could not be shut off for more than half an hour, Rather than $35,000 of damage as in each of the first two sprinkler incidents, the extended delay to turn the water off during the third incident, resulted in more than $1,000,000 in damage and required four owners to relocate for more than nine months.
For some time, residents have expressed concern as to the absence of a live in caretaker. Had a live in caretaker been present at 3:00 AM on March 14th, 2021, the water could have shut off in less than ten minutes. A great deal of grief and more than a million dollars in damage could have been prevented. Given the absence of a live in caretaker, why did no board member act immediately and turn the water supply off?
The AGM chairman refused to review the Reserve Fund Budget. Why are $15,000 in renovations to the caretaker suite proposed when the caretaker does not reside in the unit? Why is the caretaker paid more than $70,000 per year and has access to a suite in which he does not reside. The previous caretaker received $36,000 per year and lived on site in the cartaker’s suite. A live in caretaker can be easily found at a cost of $36,000 per year and provided with accommodation in the caretaker suite, saving unit owners more than $34,000 per year. The average caretaker salary in Canada is less than $35,000 per year.
Our caretaker operates two private business in addition to his caretaker job. Unbeknown to residents, our caretaker is not employed by SCC. SCC has a contract with a company owned by the caretaker to provide “cleaning services” at $5,800 per month ($70,000 per year). As GST is applicable to such services, has SCC paid GST on this expense? If not, the Corporation may be liable for GST applicable to this service provided by this company for more than four years. Have unit owners been subjected to such liability? Clearly, the board should have been aware of potential GST implications when they contracted this service. SCC could have simply hired a live in caretaker for $36,000 and provided him with the caretaker’s suite with no GST implications. This matter requires urgent attention.
A reserve fund expenditure of concern is the $17,927 for flooring lobby, steam room, party room, gym. These items did not appear in the 2023 budget presented at the 2023 AGM. Residents should have had an opportunity to hear the need for such expenditures and approve or disapprove. The chairman refused to review this or any other reserve fund expenditure at the AGM. What was the reason for this expenditure, what was purchased and at what cost? Why was yet another water heater purchased? How many water heaters have been purchased in the past ten years? Why have numerous water heaters failed?
In the 2023 budget, painting of balconies was included at a cost of $12,000 which was reasonable. In the June 30th, 2024 reserve fund budget the cost increased to $22,200. What happened? How many written bids were obtained? This amount is totally unreasonable.
The Condominium Property Act requires that a Reserve Fund Study be conducted every five years with the next study to be completed in the current fiscal year ending June 30th, 2025. Why was this cost included in the 2023 reserve fund forecast but not included in the current reserve fund budget?
There are many questions and concerns that should have been discussed at the AGM. I attempted to ask questions to matters as have been noted in this review of the AGM however Mr. Beckman made every attempt to avoid my questions and was certainly not willing to discuss anything relating to GST “as it was too complicated”. Residents must not be left with unanswered questions to important issues only because the chairman finds issues to be “too complicated”.
The chairman obviously wished to conclude the meeting as soon as possible and clearly failed to provide a reasonable review of building issues and essentially no review of the financial statements. Such irresponsible conduct, disrespect and neglect raises some very serious questions and concerns among residents.