International real estate owners warn against investing in Whistler
WHISTLER, BC, June 3, 2014 /CNW/ - An international group of property owners in Whistler is cautioning anyone who is thinking about investing there to re-consider.
The condo owners have been locked out of their own property by an opportunistic investor in a condominium project who appointed himself rental manager, took control of their units, rented out their properties and kept the proceeds. Property values have declined nearly 80% and owners remain locked out of their property today.
The condo owners say the Resort Municipality of Whistler (RMOW) has enabled and could easily resolve the situation, but by not taking a stand, the RMOW is jeopardizing Whistler's entire real estate model.
Jon Sobel, speaking for the group of owners, says, "Some people put a lot of their life savings into this project and they're being starved out. In business you expect ups and downs, but you don't expect that a world-class resort would enable such conduct."
The group is launching a social media campaign to warn the international investment community of the economic and political risks of investing in Whistler.
The dispute is over a series of rules called "Phase II covenants" that the City of Whistler (RMOW) places on condo use for each of the nearly 5,000 hotel condo units in Whistler. A RMOW rule requiring units in a building be managed by a single rental manager was used by the investor to appoint himself as manager, lock other owners out of their property and use their rooms without compensation.
The manager is a real estate investor who previously practiced law in BC and has been involved in real estate disputes before. The manager has repeatedly threatened to sue condo owners in BC courts unless they agree to his control and has previously been sanctioned by the BC Law Society for misusing client trust funds and for violating a court order.
Some owners have been forced to declare foreclosure - only to have their units purchased by the same manager at 20% of the original value.
The owners say Whistler's Phase II covenant permits Whistler to release units from the single manager rule - even if only temporarily - but that Whistler has done nothing, despite several appeals by the condo owners.
Owners say when Whistler lacks the leadership to stop third parties from exploiting their rules, the Whistler real estate model is simply too dangerous.
The project at the centre of the dispute, Nita Lake Lodge, was built in 2008 but the original developer ran into financial difficulty. A large number of units ended up in the hands of a majority investor in late 2011.
That investor seized control of the front (booking) desk and cut off revenue to the other owners. The owners contend that according to BC law, a majority owner cannot act in ways that are significantly unfair to others.
Owners had earlier sought the assistance of the BC Courts. But even the BC Courts cannot help Whistler Phase II investors unless Whistler itself first opines on and enforce its own rules.
The owners have asked the Mayor and City Councilors repeatedly to take action to protect the integrity of investing in Whistler. Owners' remain locked out of their own property and their property values are down nearly 80%. The owners contend that until Whistler is willing to prevent abuse of its own rules, the risks of investing in Phase II real estate in Whistler are simply too great.
The group has established a website www.beware-at-whistler.com outlining the flaws in Whistler's real estate model and cautioning others about risks in Whistler Phase II real estate.
Image with caption: "www.beware-at-whistler.com (CNW Group/Beware at Whistler)". Image available at: http://photos.newswire.ca/images/download/20140603_C8232_PHOTO_EN_41027.jpg
Image with caption: "Image of Nita Lake Lodge a Phase II Property in Whistler British Columbia (CNW Group/Beware at Whistler)". Image available at: http://photos.newswire.ca/images/download/20140603_C8232_PHOTO_EN_41028.jpg
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