BC Housing sues investors who bought condos against the rules

Housing Minister Ravi Kahlon said five of the people have returned the condos, but the government will pursue others in court.

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BC Housing is suing 13 people accused of lying to buy taxpayer-subsidized, below-market condominiums in Victoria, raising fears that similar fraudulent behavior could be used to benefit from income-based housing programs. income.

The 135-unit Vivid The condo in Victoria was built using a $53 million low-interest loan from the government of British Columbia. The units would be sold at below-market prices to middle-income British Columbia residents with a household income of less than $150,000 a year.

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But some buyers were not middle-income, but turned out to be real estate investors with multiple properties.

One of the buyers was a Victorian real estate agent, Janet Yu of Sutton Group West Coast Realty. Court documents allege she purchased one Vivid unit in 2018 for $451,720 and then earned more than $52,000 in commission on 11 other units she helped sell to buyers who also should not have qualified for the program.

“Nearly all of the buyers whom Defendant represented as a real estate agent also failed to comply with the terms of the affordable homeownership agreement,” the notice of civil claim said.

Yu is accused of giving clients incorrect advice about their obligation to purchase deals, according to the civil lawsuit.

Yu did not live in the condominium as his primary residence and owns four other properties, the claim states.

vivid condos
The 135-unit Vivid condominium in Victoria was built thanks to a $53 million low-interest loan from the British Columbia government. But some buyers were not middle-income, but turned out to be real estate investors with multiple properties. Photo by DARREN STONE /COLONIST TIMES

The allegations have not been proven in court. Postmedia reached out to Yu for comment but did not receive a response.

British Columbia Housing Minister Ravi Kahlon said “it’s outrageous that people (investors) are taking advantage of housing that is being made available to people struggling to find housing in our community.”

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Kahlon said since the province began its investigation in 2021, more safeguards have been put in place to prevent people from accessing below-market housing programs despite being above the income threshold.

For example, the potential buyer must be a resident of British Columbia and must not own other property.

Five of the owners have returned the condos to the province and another five are being pursued in court, Kahlon said.

“These are private investors who are accused of abusing the system,” he said.

The Housing Ministry said the project was started in 2017 by the former BC Liberal government under the program called the Community Partnership Initiative. Prospective homebuyers were vetted at the time of purchase by the developer, Chard Development Ltd., and an independent third party appointed by Chard to monitor compliance.

Chard Development President and CEO Byron Chard said in a statement: “At the time of purchase, the buyers committed to living in the building for two full years following its completion as their primary residence. As this matter is before the courts, it would not be appropriate to comment further.”

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When the NDP government and BC Housing launched the Housing Hub program in 2018, which provided low-interest loans to developers to build housing for middle-income families, stronger criteria were added to ensure that people who already owned other properties could not purchasing units.

These include a requirement that the unit be the buyer’s primary residence, that the buyer cannot own other residential properties, that the purchaser can only purchase one unit, and must live in the property for at least five years.

BC United financial critic Peter Milobar said that even though the NDP attempted to shift blame to the previous BC Liberal government, he said the NDP dropped the ball by failing to ensure adequate oversight of potential buyers.

“The fact that there was so little oversight and double-checking of people’s applications is shocking,” Milobar said, adding that the Housing Hub was a program cited by Ernst and Young auditors tasked with examining BC Housing’s finances in amid concerns about a lack of due diligence.

Postmedia asked Kahlon if people seeking to qualify for below-market rentals offered through the NDP government’s new BC Builds program may use similar fraudulent tactics. To qualify for below-market rent through that program, people must have a household income of no more than $131,950 for a studio or one-bedroom home, or $191,910 for a two-bedroom home or more.

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“We know that as we implement more homeownership opportunities, we need to implement accountability measures,” Kahlon said, adding that those accountability measures are now in place for the below-market ownership program.

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