Talk about a bubble bursting all you want. For many Toronto condo owners, the problem lies not within rising property values or a market that’s far too hot. It’s about putting your trust in the wrong hands.
Those condo owners are the ones who purchased units that belonged to Channel Property Management. Channel was overseen largely by its president, Manzoor Moorshed Khan, a man who oversaw the management of at least seven condominiums in Toronto, and who used them to obtain funds illegally. Now, the owners in those units are being asked to foot the bill for his indiscretions.
The investigation against Khan was begun by The Toronto Star in September 2011; and it showed that he had borrowed millions of dollars against many Toronto condominium corporations. And that he borrowed it without the knowledge of those owners, or the corporation. The lawyers working on the case say that the total misappropriation of funds equals more than $20 million.
A condominium at 10 Marbrooke Lane now owes $4.5 million for Kahn’s illicit activities, while a luxury condo downtown at 25 Grenville Street now owes $3 million thanks to Kahn. Kahn also left two different loans at 236 Albion Road totaling $5.5 million.
Unfortunately, it doesn’t look as though Mr. Kahn stuck around long enough to own up to his debts. Soon after his fraudulent activities came to light, he as well as the rest of the staff at Channel Property Management were evicted from the Woodbridge office they had been renting. Shortly after, it was reported that Khan had gone back home to Bangladesh. No one has heard from his since.
So who’s on the hook for paying his outstanding debts? Most unfortunately, it’s the condo owners, who have been asked to fork over thousands of dollars worth in fees – mostly assessment fees.
“I have just been asked to pay $975 in special assessment fees, every owner has to pay,” says Avijit Barua, who owns one of the units at 10 Marbrooke Lane. “It’s a lot of money. Mr. Khan gave us a lot of problems.”
Another resident who wished to remain anonymous, also said that it was most difficult to come up with the money.
“It was a hardship,” he said. “We were told we probably will have another $100,000 assessment over the winter.”
But Golam Chowdhury, a software developer that lives in one of the Etobicoke buildings Kahn oversaw says that there’s an even bigger problem at stake..
“We had a $1 million assessment in one year, from September 2010 to August 2011,” he said, telling The Star that at that time, condo owners were expected to pay $1,200 a month for maintenance. That was in addition to utility bills that were left unpaid. But what’s the bigger problem?
“Our property value has depreciated by almost 50 per cent,” he says. “It’s been a really tough time.”
This, says another condo owner, is because word has gotten out about the problems at the different buildings and now, no one wants to buy.
But don’t expect any of these condo owners to just sit back and accept what’s happened to them – they’re taking action.
Many of the buildings have filed civil suits against Khan, and against Channel Property Management. Some are even suing their condo board for not having better due diligence.