When you found out.... They are already gone. In the papers they call it an alleged Misappropriation of funds. It's a theft. A well planned and choreographed theft with many players. It needed multiple players to turn a blind eye or an ignorant eye to the theft. Who would you like to blame? Here's the background.
The total misappropriation may top $20 million. Several buildings have filed civil suits against Channel and Khan, who is thought to have fled the country. Police are investigating.
Some condo corporations allege Khan forged signatures and created fake meeting minutes to register a bylaw that allowed him to obtain loans without the board’s knowledge. The money was funnelled into a separate bank account.
Residents in some buildings across Greater Toronto are now on the hook for these outstanding loans, while others are talking with insurance companies and lenders to figure out who must foot the bill.
Whether condo owners will be left to cover the costs depends on the details, said real estate lawyer Ray Mikkola of law firm Pallet Valo.
“Where the management agreements specifically authorized the manager to bind the corporation, and if the board could have detected the fraud but recklessly or negligently failed to do so, or if the corporation benefitted from some of the money. . . the corporation may be in trouble,” Mikkola said.
The condominium owners were [allegedly] defrauded. BUT:
Does the law firm that represented and permitted the placement of mortgages on the title of these individual buildings have liability and culpability in the indebtedness of their clients? They met with somebody, they prepared, investigated and crafted minute books; recorded the history of condo meetings, reviewed notes and minutes of Board Meetings to verify that indeed their client was entitled and enabled to borrow funds and in debt the condo corporation. The law firm acting for the lender had an obligation and gave an opinion that the mortgage registration was valid, Title was good and they had valid executed documents. Why do I say their clients? Their CLIENT is the individual condominium corporation.
The Loan committee, OFFICER, Manager of whatever Financial Institution [BANK] should be responsible [remember proportional liability?] for their lack of due diligence to investigate the legitimate need and authority of a single individual to produce a packaged loan application. I would like to see that performance review.
When you purchased your condominium unit, you also purchased Title Insurance. Title Insurance has some provisions for title fraud. I cannot obtain a definitive answer other than the questions I have asked are being taken under advisement.
Your Home Insurance Policy may participate in a claim for theft against something of value in your condominium. Both independent Brokers I inquired with believe there could be merit in a claim. Neither wish to be on the record.
The Condominium Status Certificate that you relied on at closing was false and misleading as to the correct financial picture of the building. Will you sue your lawyer who gave his/her blessing on your Condo Status Certificate? Now the Law Society Levy on each transaction is also included.
Would an additional layer of Government control have helped? What will you do now?