IAG says when they took initial inventory of the apartments in April 2019 they found much worse damage than they had anticipated, including white and black mould in a number of units. (Photo courtesy IAG Enterprises)

IAG says when they took initial inventory of the apartments in April 2019 they found much worse damage than they had anticipated, including white and black mould in a number of units. (Photo courtesy IAG Enterprises)

Housing committee recommends District deny strata application for 1425 Nalabila Boulevard

Council is set to consider the matter at their June 1 meeting

  • Jun. 1, 2020 12:00 a.m.

The Kitimat Northern Sentinel has learned that the District of Kitimat has voted unanimously to approve a strata application for 1425 Nalabila Boulevard, with amendments. Residents living at the building will have a choice between a buyout that is based on how long they have lived at the address and being able to stay at the property for an additional period in rent-tied-to-income housing following registration of the strata plan.

Attaea Wagner will have lived at the property for 10 years in September. She said when she first moved there she had a good relationship with the multiple owners who owned the property over the years.

However she said this changed after the property was sold to its most recent owners, IAG Enterprises, in late 2018.

Wagner said it was around June of 2019 that the nine families living in the complex at the time were served with eviction notices. The reason given was that IAG needed to hire contractors to fix significant damage, namely asbestos and mould from burst water pipes.

Ironically, Wagner said it was likely her who called in the majority of problems with the (mostly vacant) units throughout the years, adding that water damage has occurred numerous times throughout her stay at the address, mainly due to neglected properties. She recalled one particular incident a few years back when the pipes burst in a nearby apartment.

“I listened to the sound for a good six days,” she said. “It was a hissing sound and during a snowstorm I went out and looked.”

After peeking into the apartment Wagner found the cause of the noise. A burst water main in the shower upstairs. “There was water coming from that bathroom, the master bedroom and trickling, flowing down to the next two levels,” she said. “The pipe just literally burst out of the floor.”

She said upon recieving the initial eviction notices her and the other tenants resolved to stand up and fight for their right to keep their apartments, enlisting the help of local housing advocate Michelle McGregor to help them with bringing the matter before the Residential Tenancy Board (RTB).

The result was a win for the tenants, with the RTB’s initial ruling in mid-September 2019 stating that while a number of residences were not up to living standards that all of the currently-occupied rentals were in adquete condition.

“We the tenants proved that our places are not mould and mildew infested,” Wagner said. “Sure, they could use paint, they could be freshened up and whatnot, who doesn’t want that after 10 years, [but] we proved that we did not need to be evicted.”

She said after the ordeal she had an initial period where things went back to normal and she felt that the issue of leaving her apartment was behind her.

It wasn’t, and within two weeks Wagner said they got a notice that was eerily-similar to the first one. Shortly after that, Wagner received a call from the on-site manager informing her that the company had to perform what they referred to as an emergency inspection pertaining to the structural integrity of the apartments.

It was during this meeting she said an inspector told her something she had never heard before.

“Just walking up and down the stairs to the basement and then upstairs they told me, ‘You really have to get out of here, the place is sinking, the middle of your place is sinking,'” she said, adding that the entire inspection took just minutes.

Wagner was skeptical. “I was like, well, you’ll have to show me whatever your findings are from your technician and give me everything you know in writing.”

She said after the second round of eviction notices that two of the remaining families did decide to vacate. As for her and the others, they weren’t going without a fight. They enlisted the help of McGregor again and, for the second time in less than a month, prepared to bring their case to the RTB.

Once again, a different adjudacator ruled in favour of the tenants. She said while the renovations were significant enough that the tenants could be asked to leave while they were taking place that they would have to be able to return after they were completed.

Happy with her second victory but a little more uncertain about the future, having already navigated the tumultous waters of the Residential Tenancy Act (RTA), Wagner said the victory was, again, short lived. “Not even two weeks later [the on-site property manager] gives us this undated notice saying that he’s made application to stratify.”

Under the RTA, the stratification of a property constitutes an independent legal basis for ending a tenancy under the Act meaning, if approved by council, Wagner and her counterparts would not be able to turn to the RTB for recourse.

For Wagner, she said she feels the whole stratification process is a last-ditch effort by a company that wants them out, adding that she found first hearing about it just weeks after their second RTB victory suspicious.

Speaking to the Kitimat Northern Sentinel, IAG Enterprises manager Phillip Cheung said this is not the case and that when the company had initially purchased the property its plan was to fix up what they understood to be a few half-renovated units.

“We thought, you know, bring up the crew, fix it up and rent them out and we’d keep the existing 10 units that were [already] rented out and have 20 to rent out to companies and whatnot.”

However Cheung said when they began to do inventory around April 2019 they found a very different reality, one that was much more in line with the stories of burst water pipes Wagner had given.

“These units were in terrible shape,” he said. “They had black mould, rot, you name it.”

At this point, Cheung said IAG contacted the District of Kitimat and told them they felt the severity of the repairs warranted a permit to begin repairs.

At this point, IAG issued what would end up being the first of the two eviction notices.

Cheung said the companies initial plans never involved ending the tenancies but that they found themselves with little alternatives, stuck with a property they had invested a large amount of capital into with no easy ways to recouperate the money after realizing their initial plan was unfeasible. “It’s a renoviction to them, but for us it is truly like there is no way around it,” he said.

Cheung said he empathizes with the tenants who feel they’re being pushed out of their homes and expressed a genuine desire to find a solution that works for both parties.

“At the end of the day, we’ve been trying to just do what’s right — [you] find a building in a terrible disarray and you try to fix it and [it’s] just been hurdle after hurdle doing the right thing — it’s actually become quite costly.”

He added that, while he could not disclose rental information, tenants would likely be paying significantly more in the current rental market, something which he feels is a significant factor in their opposition to the stratification.

“They’ll say that we haven’t reached out to them or tried to offer something but I think this kind of goes both ways,” he said. “We have tried to kind of figure out solutions with them but I think they’re quite rigid on what their stance is and it’s basically that they want to be moved back to a renovated unit at their original rental cost.”

As for Cheung, he said his main concern at this point is recouperating capital from the project.

“It’s not even really about getting rental at market rate anymore, the fact of the matter is we just want to sell the units,” he said. “Once you put so much capital into a project and you can’t get financing for it the only business model that makes sense is you have to recoup your costs and so that you have that money for something else.”

The District previously passed a motion unanimously at their April 20 meeting to receive and table the application so that it could be reviewed by the committee.

Even prior to the decision by the committee, councillors had expressed concerts at a April 14 meeting about the potential impacts stratification could have on the tenants. Notably Coun. Lani Gibson expressed concerns with a proposal to offer four low-income housing units to any Kitimat resident who wished to apply after stratification was complete for a total of 18 months.

“We are looking at a boom that, from everything I’ve heard, is expected to last at least another five years,” said Gibson, who added that the District had heard that many of these individuals would be leaving the community if the stratification conversion is allowed.

“I personally am hoping that we’re going to see something better than a 12-to-18 month option coming back to us, just because I think we owe it to these tenants that they can remain in this community through the boom.”

Gibson also expressed concerns about opening up potential low-income housing to the District as a whole versus guaranteeing the tenants their units post-stratification. She noted the applicant had previously tried to evict the tenants to perform renovations before applying for stratification and that the Residential Tenancy Branch (RTB) had already ruled in favour of the tenants.

“I think what’s important here is again the RTB ruling twice in favour of these tenants [and] that their contracts need to be upheld,” she said. “Although I generally like the idea of having low-income housing in Kitimat I don’t think it’s appropriate in this circumstance to open it up to the community.”

Coun. Mario Feldhoff agreed. “I think that there’s a responsibility to recognize the existing tenants.”

For IAG’s part, they noted the stratification request is completely independent from the initial application to evict the tenants to perform renovations. “The result of the Bearing has nothing to do with the stratification of the Property, or the basis upon which the existing tenancies may end under the Residential Tenancy Act,” a letter from IAG’s legal counsel presented to Council at their April 20 meeting reads. “Should stratification proceed, our client intends to end the existing tenancies, not for renovation purposes, but rather, because stratification has occurred. This is an independent legal basis for ending a tenancy under the Act. It has a different policy basis: namely, to reflect the fact that the type of property the tenant occupied has fundamentally changed because of stratification.”

The letter adds that due to the above the reasoning of arbitrators at previous RTB hearings cannot be applied to what is happening with the property now, because the arbitrator at the hearing was not dealing with notices to end tenancy based on stratification. Cheung also explained that because it would take at least 18 months from stratification approval to implement it’s proposed relocation plan that residents would be able to continue living in the apartment during these months as well. “When we actually look at that timing the current tenants … would already be there for 18 months or longer and then they have another 18 months to continue there living.”

IAG has highlighted vacancy in Kitimat in support of its application, however some councillors felt this painted an inaccurate picture of Kitimat’s housing situation. Members of council have previously alluded to local vacancy rates being impacted by landlords withholding units in anticipation of an LNG-centric boom over the next years.

“We’ve seen reference to vacancy rates in Kitimat but we’re not seeing a reference to the availability issues in Kitimat around landlords purposely holding units vacant and around landlords screening for very specific tenants,” said Gibson, who added people have been seemingly denied the ability to rent based on socio-economic conditions.

Gibson said regardless of an eviction by stratification being a separate and completely legal process it was important to look at the tenants previous RTB victories.

“I do want to work with this developer, I’ve said in the past I very much want to support this developer in our community, but we have to bear in mind the existing rulings.”

The Housing Committee’s decision does not force council to deny the application but instead is a non-binding recommendation which council considered at their June 1 meeting.

Cheung said the decision caught him off guard.

I’m quite surprised,” he said, adding that the sense he got from the meeting was the committee wanted to simultaneously keep locals while seeing local housing options get updated.

He also cautioned about the dangers of council setting a precedence that deterred future development from within the area. “I feel like if it becomes so difficult for someone to do the right thing then things are just going to get left and if that happens then you have more and more places become like a slum,” he said. “I think that would be the worst thing to happen to Kitimat, if council sets precedents that become too difficult.”


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