Condo owners consider bankruptcy as lawsuits plague one of Fort McMurray's largest rebuilds

Residents of a 214-unit townhouse-style condo complex, one of the biggest Fort McMurray wildfire rebuilds, are booking appointments with lawyers or considering foreclosure and bankruptcy.

'We feel like rats in a maze and there is no cheese,' says one owner

The Hillview Park condos as of March 13. Owners thought they were supposed to be in their homes by now. Instead, their condos remain part of a construction site. (David Thurton/ CBC)

Some condo owners in Fort McMurray thought they would have been back in their rebuilt units by now.

Instead, some residents of a 214-unit townhouse-style condo complex called Hillview Park, one of the biggest Fort McMurray wildfire rebuilds, are booking appointments with lawyers or considering foreclosure and bankruptcy.

Some told CBC News they haven't been getting clear answers from the condo board since builder Viceroy Construction was removed from the project.

Sheila Champion and her husband say they can't afford to live in Fort McMurray anymore, with mortgage payments on a condo that hasn't been rebuilt.

The couple and their son moved to Yellowknife, N.W.T., where they were able to find better paying jobs after low oil prices sent Fort McMurray's economy into a tailspin.

Sheila Champion and her husband Shannon say they can’t afford to live in Fort McMurray anymore. (Submitted)

The couple says they are barely keeping their heads above water.

"We were all left in the dark," said Sheila Champion. "There was very little transfer of information from the board to the ownership."

When concerns were first raised about the construction project in May 2017, condo board member Charles Scott agreed to an interview with CBC.

Scott said the board planned to do a phased re-entry and planned to have the last homeowner in by mid-February 2018.

CBC has tried to do follow-up interviews with Scott and other Hillview Park Condominium corporation board members to ask about the apparent delays and allegations that condo members have not been kept informed.

CBC has not received a response.

It's unclear how far along the rebuild has progressed. A March visit to the site showed foundations had been poured and wood framing of future townhouses was taking shape.

Legal limbo

Viceroy Construction declined to do an interview. But the company filed a lawsuit in December alleging its $63,921,387 contract was wrongfully terminated on August 31, 2017.

The lawsuit names Hillview Park Condo, Scott and Specialized Property Evaluation Control Services, better known as SPECs, as defendants.

Among the claims, Viceroy alleges Hillview ordered extra work outside the contract scope and did not pay for it.

Viceroy also alleges Scott was negligent because he said he would negotiate on the builder's behalf to ensure the company would be paid for their extra work.

Viceroy claimed in the lawsuit the condo corporation and SPECs failed to approve the extra costs.

The builder is suing for a total of $54,575,305.

Hillview Condo Corporation and SPECs denied the allegations in statements of defence. Scott is yet to file a legal document responding to the allegations.

The condo corporation said it denies it demanded Viceroy to perform work outside of the contract. SPECs says it was not negligent in the matter.

The Hillview Park wildfire rebuild is mired in lawsuits. (David Thurton/ CBC)

The condo corporation has filed a counter lawsuit that blames Viceroy for "numerous issues" that arose during the construction process. It alleges Viceroy was negligent in ensuring work was free from defects, was completed on time and that subcontractors were paid on deadline.

Viceroy's negligence, the lawsuit alleges, has caused the condo corporation to do substantial rework and repairs on the project. The condo corporation is suing for $9.3 million and other additional costs.

Viceroy responded by denying the counter-suit allegations and said the defects and delays, if true, were caused because Hillview breached the contract in the first place.

None of the allegations in either lawsuit have been proven in court.

Owners bearing the costs

While the condo board has not responded to CBC's recent requests for comment, a message on the condominium's internal website said that owners will have to bear the costs to fix the alleged problems left in the wake of Viceroy's departure.

The condo board has told owners its insurance won't cover additional rework costs. So owners like Melissa Van Den Broek will have to bear the burden.

A board statement on the internal website to Van Den Broek and others said that in order for the rebuild to proceed they must borrow $6 million for address repairs. The board has levied a special assessment on each homeowner.

Van Den Broek and her husband now live in London, Ont. They were renting out their condo at the time of the wildfire.

Melissa Van Den Broek poses with her sons and husband Jacob. Condo owners like her say they will have to bear the burden of the extra costs of rebuilding their condo. (Submitted)

Once rebuilt, they had hoped to sell it and pay off the $315,000 remaining on their mortgage, then buy a new home for their growing family.

But with no hope for selling anytime soon, and with the need to come up with $32,000 under the special assessment, Van Den Broek said she fears her family and others might have to walk away.

"We are nervous about all the owners going bankrupt and foreclosing," Van Den Broek said.

'Rats in a maze'

Rebekah Benoit and her husband have already seen a lawyer and are considering their options. Benoit said her family has spent their savings and used up credit to the point where they don't think they can spend another year paying a mortgage and condo fees.

Benoit, her husband and two children left Alberta for Montana and rented their Fort McMurray condo. But now, on the hook for mortgage payments and unable to sell, Benoit said she wonders if it's cheaper to just walk away.

Rebekah Benoit, her husband Jason and their family moved to Montana and decided to rent their Fort McMurray condo. Still on the hook for mortgage payments and unable to sell their condo, Rebekah wonders if its cheaper to just walk away. (Submitted)

"We worked our entire lives for this," Benoit said. "We feel like rats in a maze and there is no cheese."    

Benoit and others hope going public in the media draws attention to their plight and will bring some transparency to their condo rebuild process.

Follow David Thurton, CBC's Fort McMurray correspondent, on Facebook and Twitter, or email him at david.thurton@cbc.ca


David Thurton is a national reporter in CBC's Parliamentary Bureau. He's worked for CBC in Fort McMurray, the Maritimes and in Canada's Arctic.