REQUEST

an appointment by Minister qualified inspectors, administrator due to Violation of Condominium Property Act (CPA), RSA 2000 Chapter C-22 & Condominium Property Regulations (CPR), Alberta Regulation 168/200 & Non-compliance to the City of Edmonton Bylaws and Safety Codes

Dear Sir/Madam,

I am the owner of the apartment at Marque Terra Losa (Condominium Corporation No. 0624562, Marquee at Terra Losa), have many concerns about the situation with our condo property maintenance, downgrading by the current Board of Directors, KDM Management Inc. property company, etc. due to the lack accountability, proper credentials, use inappropriate contractors, shadow capital expenses (not recognized/approved per capital reserve fund study, approved/signed by designated specialist per the Condominium Property Act (CPA), C-22 RSA 2000, and the Condominium Property Regulation (CPR), Alta Reg. 168/2000) and other issues.

This letter serves as a formal request for an appointment by the Minister of qualified individuals as inspectors, and administrators for the proper investigation of all Condo Board Businesses and Affairs to comply with the City of Edmonton bylaws, provincial and federal laws due to the following violations and deficiencies (as on November 27, 2023):

1. The Board of Directors currently faces significant issues regarding legitimacy, accountability, and decision-making authority. There is a concerning trend of members overstaying their tenure without proper justification (it's legal at some point, but is it ethical, moral, or beneficial? This includes instances such as:

G. W., who became the Chairman of the Condo Board in 2014, currently holds this position. He has acted and is acting as a property manager without the proper credentials, such as the requisite education, skills, or license. G. W. has inappropriately acted as a property manager despite lacking the necessary qualifications. Similarly, P. W. and K. M. have remained on the Board beyond the expiration of their terms in 2016, and M. Ad. and J. L. have done the same since 2017.
P. W. and K. M.'s second-year terms expired in 2016; however, both are still serving on the Board.
M. Ad. and J. L.’s second-year term expired in 2017; despite this, she, along with all the aforementioned members, remains on the Board.
B. D. has been on the Board of Directors since 2021 and at the same time, he is a contractor. The conflict of interest (principal-agent problem) was raised in 2013 -2014 for his dual roles; however, the property manager, the auditor, and the internal control ignored it and we see this problem over and over again.

The core of the problem lies in the property management legislation, which does not enforce the two-year term limit and mandatory cooling-off periods effectively. This oversight has led to a disengaged resident community, with many losing interest in participating in the annual general meeting. The absence of strict term limits opens the door to potential bribery and a rise in incompetence, exacerbated by the concentration of power.

To rectify this situation, it requires amendments to the laws to enforce term limits strictly, introduce mandatory cooling-off periods, and require Board members to have the appropriate credentials for their roles. Furthermore, implementing transparent processes for electing Board members and establishing clear accountability measures will help restore trust and encourage resident participation. These changes are vital to ensure the Board operates with integrity and in the best interest of the unit owners and renters.

2. The Requirements of the Corporate Governance Amendments to the Condominium Property Act

B. D., who served as the President of the Condo Board from 2013 to 2014, simultaneously performed contract work such as metalwork and snow shovelling by tractor (2013 – the current time). This dual role was both illegal and unethical. Despite these concerns, B. D., a close friend of G. W. (we see the private personal benefits of staying on the Board), continued to use the residential property parking for his tractor during winter, a clear violation of the Condominium Property Act, Fire Safety codes, and Residential Bylaws which prohibit parking for non-residential, commercial activities as it outlined in Section 1(1)(w)(i) CPA, C-22 RSA 2000, Section 34.3 the initial Corporation Bylaw, Section 34(2) new bylaws from the schedule #4 CPR, Alta Reg.168/2000 (as the Condo Board failed to revise and update the Initial Corporation Bylaws, into effect from January 1, 2021, the schedule #4 CPR, Alta Reg.168/2000).

Furthermore, from 2014 to 2023, B. D.'s commercial use of the residential property and his failure to report this activity to the Canadian Revenue Agency (CRA) and the City of Edmonton breached the Income Tax Act (ITA) and CRA Regulations. This unreported activity, which should be classified/recognized and taxed differently (as a business) from residential use, is illegal (it’s illegal using at all). We have other residents who work as contractors for the Corporation; however, the public disclosure and reporting weren’t done in accordance with ITA regulations.

Elected anew to the Board of Directors in 2021, B. D.'s continued work as a contractor for Marque Terra Losa renders him ineligible for board membership. This is a direct violation of Section 33 CPA, C-22 RSA 2000, and Section 6(4)d of the Schedule 4 of CPR, Alta Reg.168/2000, which specifies that a person with a private interest in any agreement, arrangement, or transaction involving the corporation is ineligible to serve on the Board during their term. See the photos and videos using the residential parking lot for business purposes.

Press the link or copy it for downloading: https://drive.proton.me/urls/RBTKZHAJFR#TmAW6wO7gR2u

Any additional witness testimony is available and will be provided to authorities upon request (photos & and videos by year).

The issue of snow removal, which stems from the previously mentioned concerns, was brought to our attention by my neighbour and me. Despite this, KDM Property Management, representing the Board of Directors, dismissed the inquiry on November 23, 2022, with the unbelievable statement: "To our knowledge, the area you have inquired about has never been included in the snow removal specifications of Marquee at Terra Losa." The fact that a snow removal contractor also serves as a Board Director exemplifies a breach of corporate governance, specifically the principal-agent problem, where the individual responsible for overseeing contractors is simultaneously profiting as a contractor.

KDM Property Management's failure to address snow removal reflects a lack of understanding of both Marquee Terra Losa's property lines and the City of Edmonton's boundaries and bylaws.

In addition, the show was removed from the surfaced parking and was stored on the sidewalks, and due to the snow blockage on our sidewalks, many residents weren’t able to safely walk and had to go around the buildings (it’s a big problem for disabled people).

Please see below the attached link for the supporting documents, including,

the letter response from KDM Management, drawing #2 refers to the Terra Losa Community's property boundary.

The link for downloading: https://drive.proton.me/urls/9XAD9RA5KC#be8OXULxIW1B

I want to share one small fact about B. D. from my time serving on the Board of Directors that's quite telling of his character. In our very first meeting, B. D. insisted that we all agree to absolute confidentiality. I had to stop myself from laughing at the absurdity of the request, which speaks volumes about his personal ethics and how we got the situation with the lack of transparency (it makes obvious, who is a beneficiary of it).

It's clear that there is a critical need for legislative reform to address the governance issues within condominium boards. Mandatory governance training for prospective board members should be incorporated into the Condominium Property Act to ensure that all members have the necessary knowledge and skills to perform their duties effectively and ethically.

As it was mentioned, the Act should be updated to enforce the departure of board members after their 2-year term has expired. This enforcement is crucial for preventing corruption and bribery by removing any ambiguity about term limits. Such amendments would promote transparency, accountability, and integrity in the management of condominium properties. Implementing these measures will not only reinforce the governance structure but also protect the interests of all unit owners and renters by ensuring that their representatives are well-trained and serve within their designated terms.

3. Concerns Regarding Fire Safety Verification and Management Actions.

I am writing to express my concerns about recent fire safety inspection issues involving KDM Property Management and Altron Company, especially concerning my unit (#103). Other residents have also expressed willingness to share similar experiences if required by the City of Edmonton Fire Safety authorities.

The correspondence between the unit’s owner and KDM Management Inc. highlights a disregard for the duties of a property manager as outlined in the Real Estate Act and Fire Safety Codes. There's also concern about the legitimacy of the contract awarded to Altron company for installing and testing smoke detectors on private property, which seems to have been enforced without proper legal authority.

Here's my experience summary as the owner of the apartment 103, 17407-99 Ave NW:

On March 13, 2023, I was notified of a fire inspection scheduled for March 29, 2023. Despite personal challenges, I was present for the inspection. I had already replaced the smoke detectors in 2022, complying with my insurance policy.

However, I was surprised to receive a letter on May 5, 2023, along with an invoice from Altron company for services I had completed myself. This was allowed by the Board's option for self-replacement. The invoice was vague and seemed to overcharge for the smoke detectors and installation. I requested the cancellation of this invoice and the removal of all charges related to the smoke detector installation from my account. I also expect either the annual verification report or a written apology for the alleged inspection failure. Being directed to contact Altron Fire is unacceptable, as the property manager should maintain these records as per the Condominium Property and Real Estate Acts.

Moreover, the Alberta Special Code Bulletin issued on March 2020 (19-FCB-003) clarifies that suite owners are responsible for maintaining fire protection devices, without the need for annual testing by a professional. The Alberta Special Code Bulletin (19-FCB-003) states that “Owners of individual suites within a multi-family building are responsible for the maintenance of fire protection system components within their dwelling unit. Detection devices include items such as local smoke alarms, heat detectors, and sprinkler heads. Annual testing by a qualified person will not involve the testing of the local smoke alarm. Testing of the local smoke alarm is the owner’s responsibility.”

This contradicts the actions of Altron and the KDM property management.

Additionally, the absence of any owner signatures on the work completion forms and the billing for these services indicate serious issues with your financial control processes. It's especially concerning given the requirement for a verification report, which I have not received.

The practices of Altron, KDM Property Management, and the Board of Directors such as billing for self-performed replacements and suggesting unverified work completion on private property with equipment, that belongs to the unit’s owner, are questionable and possibly fraudulent. As a homeowner, I have the right to maintain my property, including smoke detector replacement (every 10 years as required), without undue interference, provided it does not pose a public risk. Charging for services not rendered infringes upon my personal rights and responsibilities. The KDM manager’s offering me the liberty of contacting directly with the Altron company directly indicates total negligence in keeping maintenance, and inspection records as required per the Condominium Property and Real Estate Acts.

At this point, we strongly believe that the City of Edmonton Fire Safety authorities should step in to address these issues and consider implementing educational programs, and certification for contractors and property managers, among other measures. We look forward to your attention to these matters. See the link for the correspondence regarding illegal charges, etc.: https://drive.proton.me/urls/KSRF3S3E34#hV7UPei3sZxn

4. As a retired Mechanical Engineer with all professional designations; with two master’s degrees: Science (Engineering), MBA (Business, Canada); three Bachelor’s degrees; Engineering (GPA 3.7 out of 4.0) Finance with Honours (GPA 4.0 out 4.0, NAIT) and Accounting with Distinction (GPA 3.9 out 4.0, MacEwan University) and former Law Enforcement Officer, I am dismayed by the blatant disregard for National and Provincial Laws, Regulations, and Codes by KDM Property Management, Board members, and contracted companies.

Plumbing and Building Code Violations

It has come to the attention of many unit’ owners that riser replacements within our buildings have not complied with the Alberta Building and Plumbing Codes, which mandate the use of copper piping and lead-free joints. These replacements were executed without proper documentation, the City of Edmonton permits, or acceptance. Additionally, these actions were taken without the mandatory approval by a Professional Engineer and subsequent acceptance by the City of Edmonton Inspector. It's also concerning that deviations from the original piping materials were not sanctioned by the necessary authorities. The Board's failure to provide a required fund study report (or extraction from the report) in 2018/19, which should detail equipment needing replacement or repair, further highlights this negligence.

The riser replacement work, conducted by T & P Mechanical during 2020-2022, raises questions due to the lack of transparency, potential ethical conflicts, and the questionable bidding process. The absence of maintenance contract reviews and As a Mechanical Engineer with multiple Canadian Business degrees, I did piping project’s cost estimation for Syncrude, Suncor, etc., I can testify that this type of job is highly questionable in terms of compliance with the Provincial Plumbing and Fire Safety Codes and fair cost estimation.

You can see the attached photos before and after, the risers’ replacement of the copper (the requirement at the parking lot due to National Building/Plumbing/Fire Safety codes) by plastic pipes.

See the attached photos: https://drive.proton.me/urls/RM7F926YDM#HoaqtfHc0tNr

See the original Drawing/Specification for risers piping at the underground parking:

https://drive.proton.me/urls/NRPJGD12DM#kgAvsmr4tSmw

As you see, the original piping specification states that “all risers and mains in Parkade shall copper piping,

lead-free joints”.

The situation with T & P Mechanical is quite typical for many residential condominiums in Alberta. Many contractors use the total absence of engineering backgrounds of the property managers, and the lack of expertise of the Board of Directors making up many problems and overcharging the clients. The big reliable engineering companies aren’t interested in small jobs, small companies like T & P Mechanical are usually run by retired or close to the retirement engineers (P.Eng.) or technologists (CET) and have 1-2 main clients only; the small engineering companies are struggling to provide (or not able at all)the full cycle of engineering job/package as it requires a certified technologist (ASET designation), certified cost estimation specialist, etc. As a result, small companies are using different kinds of handymans without proper training and certifications (or using not own certifications).

The further repair inside the apartments by unqualified staff requires your attention, too. Using a metal list of 2-3 mm instead of the drywall ("know-how") as stated in the initial buildings or standard insurable unit description (SUID) specifications - it’s totally unacceptable.

Unapproved Air Heater relocation, connected to Air Heater piping alterations (changes) at the underground parking lot of the building at 17407- 99 Ave NW, Increased Heating Bills

In 2014-2015, unauthorized alterations to plumbing and piping associated with the Air Heater (UH-1) in the underground parking compromised the integrity of the "Air Heat Lock," leading to increased heating bills for the owners. The Air Heater (UH-1) and piping alterations were done by “Jetco Mechanical” plumbers. I tried to explain to the plumber with the “Jetco” logo about the legal complications of unapproved relocation, changed piping job due to violated various codes, bylaws of the City of Edmonton, etc. This job wasn’t approved by a Professional Engineer, wasn’t accepted by the City of Edmonton Inspector, and "as built" drawings weren’t issued.

See the attached drawings, photo, and spec.: https://drive.proton.me/urls/K3HTG8JSNC#I5z2MjfPclul

Potential Health Safety Hazards for Residents of Marquee at Terra Losa Condo and Non-Authorized Job. During the summer of 2021, I noticed that the vinyl siding had been taken off outside apartment 104 at 17407-99 Avenue. When I questioned the contractors about why they were replacing the siding, one worker—who wouldn't give his name or the name of his company—said there was mold and a hole on the exterior of the building. This same person then tore down the concrete balcony slab and replaced it with a new one, adding a Duradek covering on top (other first-floor balconies don’t have it in the buildings at 17407 and 17415-99 Avenue). This work related to vinyl replacement, repouring concrete balcony slab, and installation of Duradek cover violated the City of Edmonton Bylaws; CPA, C-22 RSA 200; CPR, Alta Reg.168/2000. It was performed not only without proper authorization but also lacked the required transparency. It wasn’t any announcements, the emergency repair wasn’t declared as it wasn’t recognized in a capital reserve fund study, and no further repair docs were provided per the current legislature. Such actions suggest a disregard for legal procedures and residential property standards, which could lead to potential safety hazards and a devaluation of property. It's crucial for such infractions to be addressed to ensure compliance and maintain the integrity and safety of the residential community.

Landscaping and Grading Issues. The recent landscaping work by Dee Construction lacked the necessary sod replacement, proper grading, and the City of Edmonton grading report submission. This lack of oversight from KDM Property Management and the absence of approval by unit owners for this capital expense reflect poorly on the internal controls and management practices. See the attached photos: https://drive.proton.me/urls/M7BWW16DGM#FulnxmsfdPpO

Given these multifaceted issues, I urge a thorough review and rectification of these concerns to ensure compliance with all relevant laws and codes and to uphold the integrity of our community's governance.

It clearly indicates the necessity of creating a provincial government (crown) maintenance and insurance company; otherwise, the lack of building maintenance and mismanagement will continue arising, and the tensions between residents and the Board of Directors, and hardly replaceable property companies will reach a critical point.

5. Appraisal’s Insurance Methodology Concerns, Other Insurance Concerns

Insurance Concerns have arisen from the recent communication by KDM Property Management concerning our condominium's insurance policy for 2023-2024. The provided insurance documentation, signed by a representative from HUB International Insurance Brokers, indicates the revised condo replacement value of 24,885,000 CAD based on the appraisal.

See the Terra Losa Umbrella Insurance by year: https://drive.proton.me/urls/0TMTWKW770#wRJUOFDuAA3A

A simple division of this total value by the number of units (82) suggests an average unit cost of 303,476 CAD, which seems inflated compared to the market value and city appraisals, which estimate the average unit value between 170,000 and 210,000 CAD.

312-17415-99-av-nw-edmonton-terra-losa

My own unit, for instance, was appraised by the City of Edmonton at 174,500 CAD in 2023 (based on the sales statistics), the apartment’s value went down from 235,000 CAD in 2013.

This discrepancy of 46.6% between city appraisal and insurance valuation raises questions about the accuracy and methodology of the insurance appraisal. As per Sect. 460 the Insurance Act, RCA 2000 Chapter I-3; it is crucial to scrutinize the qualifications and license of the appraisers/adjusters involved. The adjuster’s/appraisal licence certificate regarding property value replacement has been never provided for the Corporation Insurance policy in the current 2023 year (the Corporation unit owners never got it for the previous years, too).

Moreover, the lack of transparency in the insurance documentation and the absence of proactive steps by KDM Property Management to validate the appraisal raise concerns about the potential for inflated premiums and the legal implications, as seen in high-profile cases of overvaluation.

There's also ambiguity surrounding the commercial liability section related to operations for our non-profit condominium. Without clarification or discussion, it's unclear if this liability extends to contractors, an essential detail for unit owners to understand.

Given these issues:

I urge KDM Property Management to conduct a thorough review of the insurance policy and update the actual replacement value from the licenced adjuster/appraiser (it has a significant difference in the appraised value from the City of Edmonton) and doesn’t align with the Sect. 763(2)(3)(4), Sect. 460 the Insurance Act & the Condominium Property Act. In addition, clarifications on the Corporation's Commercial Liabilities. Commercial Umbrella Liability insurance, while it may seem more relevant for businesses. At this point, the detailed specifications, reasoning, and the contractor’s insurance policies provisions can clarify full insurance protection as the Corporation doesn’t have to provide commercial insurance liability coverage to the contractors.
Also, it’s critical for the Government of Alberta to provide affordable condominium insurance companies with the sole methodology regarding condo property value replacement, involve in this process a properly licenced (as required per Sect. 460 of the Insurance Act) adjusters/appraisers, prevent continuously worsening property insurance situation, increasing premiums, increasing deductibles, as a result increasing condo fees. All these factors are making our provincial housing market less affordable with a potential blowdown of this market (many residents of condo properties are about a step away due to no reason of being condo property owners).
To address these issues, establishing a crown provincial property maintenance and insurance company (like SGI in Saskatchewan) would ensure access to skilled professionals for both large and small jobs, preventing overcharging and maintaining fair costs for condo owners, it will help to keep condo property ownership affordable.

6. RECA Certifications, Property Management Company Qualification’s Insurance Concerns, Property Management Company Contract Renewal Issues, Transitional Crown Property Maintenance and Insurance Company (?)

The recent revisions to residential property legislation in Alberta have ushered in much-needed reforms and positive change. However, it has come to our attention that there is a notable gap in the qualifications of personnel within our property management sector, particularly in the areas of building operations, technology, engineering, and certified accounting and finance.

There are some big essential issues for the proficient management of residential properties:

Professional Qualifications: Alberta's residential property legislation reforms have been beneficial, but they overlook a crucial aspect: the qualifications of property management personnel. Proficiency in building operations, technology, engineering, and accounting is indispensable for effective management.
RECA's Dual Role: The Real Estate Council of Alberta (RECA)'s role in both certifying property managers and resolving disputes is problematic, potentially leading to conflicts of interest. A separation of these functions would enhance fairness and integrity in dispute resolution.
Diversification of Certification Authorities: Professional bodies like ASET (The Association of Science & Engineering Technology Professionals of Alberta), APEGA (The Association of Professional Engineers and Geoscientists of Alberta) and CPA (Chartered Professional Accountants) with the expertise of the government agency ABSA (Alberta Boilers Safety Association) should be involved in the certification process, leveraging their specific expertise to ensure property managers are adequately qualified. The RECA scope of property management certification doesn't include the reality of property manager work situations; the building operator class 5 has more knowledge than any property manager with RECA courses (mostly focused on brokerage).
Elevated Expertise Requirements: The complexity of property management demands a high level of expertise. I recommend a minimum of Building Operator Class 5 certification, ideally Class 4, alongside a two-year diploma in accounting or finance. Currently, having managers with merely a high school diploma and irrelevant certificates is insufficient you can see from the correspondence with KDM Management, that the manager failed to fulfil the scope of property management by simple tasks such as writing a formal business letter, building a rapport with the units’ owners (I’ve been observed using a very bad and intimidating tone towards the residents many times), understanding basic electrical, building, fire codes, etc.
Educational Standards: Programs like the one at MacEwan University, which integrates a business degree with a property management specialization, should be the standard. Enhancing educational requirements will significantly improve the quality of property management services.
Contract Renewal Process: The government should revise the Condominium Property Act and Regulations to include a structured contract renewal process, emphasizing performance benchmarks and staff qualifications.
Insufficient Supervision by Property Management: Despite requirements outlined in the Real Estate Act for property managers to supervise contractors, we've observed a lack of oversight. It's essential that only those with the requisite education, property engineering and business skills, and board delegation act as property managers.
Shortage of Skilled Tradespeople: There's a shortage of trained personnel like plumbers and electricians willing to take on small jobs at reasonable rates. To address this, a government-run property maintenance and insurance entity, similar to SGI, could provide these services fairly and efficiently.