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Some new condos built to crumble

Some new Montreal condos built to crumble




MONTREAL - Geneviève Maclean’s dream home became a nightmare in October 2009 when a plumbing fixture hidden in a wall on the first floor of her condo building bust.

The leak flooded her garage space. But that wasn’t what would turn her life upside down. It wasn’t even close.

What drove her family and the six other occupants out of the new condo building at 716 St. Ferdinand St. in St. Henri was the discovery that the structure was literally in the process of collapsing.

When her insurance company sent an engineer to check out the water damage, he opened the ceiling and discovered the floor joists were buckling under the full weight of the three-storey building.

The problem was that the builders – Développements TGB Inc. – had failed to install blocking that would have transferred the weight of the supporting walls down to the structure’s concrete base.

Because of this critical flaw, the building was resting on aspenite floor joists, which are designed to bear only the weight of furniture and people. With the entire building sitting on them, the thin first-floor joists were at various stages of collapse. Some had warped, some were bent and some had already broken in half. The occupants’ lives were in danger.

Which was why the city of Montreal condemned the building and ordered its immediate evacuation.

“Thank god we found what was wrong,” Maclean, 29, said. “Otherwise we could have been killed.”

Hoping the contractor will repair the faults, Maclean has been reluctant to sign a lease elsewhere and therefore she, her child and her husband have had to move seven times as she struggles to continue to pay her mortgage instalments as well as city taxes.

The dangerous construction that threatened the lives of Maclean and her fellow condo owners, some of whom say they are on the edge of bankruptcy, has launched them into the muddy world of fly-by-night contractors and has revealed serious deficiencies in Quebec’s building inspection system as well as its New Home Guarantee plan.

A Gazette investigation has found three TGB condo projects have critical construction flaws that have turned home ownership into home misery for the owners.

Over the last decade, Quebec has been hit by an unprecedented condo building boom that has transformed home ownership in the province.

At the same time, the province has placed responsibility for building inspection on municipalities, most of whom don’t have the resources to track new construction. After city building departments approve construction plans, they leave it to the contractor and homeowner to assure the work is properly done.

This has left the path wide open for unscrupulous contractors to operate a dangerous hit-and-run game where they abandon condo owners to their own devices as soon as they have sold out the building.

The onus then falls on the homeowners to take expensive legal action against the contractors and/or seek restitution through the government’s New Home Guarantee plan. Either way, disputes can take years to resolve with no guarantee that the contractor will ever make the needed repairs.

Repairs can be enormously expensive. Maclean’s building needs an estimated $542,000 in work to reinforce the structure, according to an engineering report submitted to an arbitration hearing. In one case in Trois Rivières (not involving TGB), 500 homes built between 2007 and 2009 require new foundations because the wrong kind of aggregate was mixed with the cement. Margolaine Veillette, spokesperson for the Régie du bâtiment, said the New Home Guarantee plan will have to shell out “dozens of millions of dollars” for the work.

Maclean and her six fellow condo owners at 716 St. Ferdinand St. have spent the last two years chasing the New Home Guarantee plan to repair their collapsing condo.

Many people agree to buy their condos on the promise that they are protected by the government’s New Home Guarantee program, which was created in 1999 to guarantee the legal and contractual obligation of building contractors. Between $700 and $900 of the cost price of a new home goes toward the warranty program.

Veillette said the mandatory program is designed to assure new homeowners that “the contractor build homes that comply with the (Quebec) Building Code and that respect certain quality standards, while also ensuring that customers are properly informed of the various steps involved in buying a new home.”

But experience with the program has taught Maclean and other condo owners that the insurance system often allows contractors to escape all responsibility for their shoddy construction and disappear into the woodwork.

“The builders have not been held accountable in any way for the extreme negligence they demonstrated during the construction, nor have they in any way offered to assist in repairing the disaster on St. Ferdinand,” Shannon McCardle, another condo owner at the St. Ferdinand building, told The Gazette.

The administrators of the New Home Guarantee program have refused to cover the repair costs to the St. Ferdinand building claiming that the five-year warranty had expired when the faults were discovered.

At issue is whether the end-of-construction agreement, which marks the beginning of the warranty period, was legally executed by the contractor.

The warranty program requires that when construction is completed, the contractor must inform the condo association that it has to hire an independent, professional building engineer to assure the work meets the building code and the specifications of the purchase agreements. The inspector’s report is then given to each condo owner. If more work is required, the owners can hold back their final payment until the faults are repaired. When the construction is deemed to be finished, all parties sign an end-of-construction document and ownership of the building is turned over to the condo association. That’s when the five-year guarantee begins.

In the case of the St. Ferdinand building, the contractor never informed the condo owners that construction was completed and that they had to hire a building inspector, according to an arbitration decision. Instead, the contractor hired his architect as the inspector.

The architect last year testified at an arbitration hearing – agreed to by the condo owners and the administrators of the New Home Guarantee program – that he signed the final inspection report only “to help (the contractor).” The contractor then convinced one of the condo owners, who didn’t represent the condo association, to sign off on the building.

An arbitration decision handed down April 15 concluded that because the building was never properly inspected by a professional chosen by the condo owners and because the association never officially signed the end-of-construction document, the entire process was illegal. Therefore, the construction never officially ended and the five-year warranty period never officially began. The arbitrator ordered the Régie du bâtiment, which administers the plan for the Association provincial des constructeurs d’habitations du Québec Inc. (APCHA), to oversee and, if the contractor defaults, pay for the repairs.

Despite the fact that the arbitrator’s decision is supposed to be final, the Régie administrators have refused to pay and are disputing the arbitration decision in Superior Court. They argue the guarantee did indeed start back in 2004 and has therefore expired. They say the homeowners have to sue the contractor TGB and its subcontractors.

Maclean said they have no money to hire lawyers. And even if they did, they would have to stand in line. TGB is party to about 60 lawsuits that involve payment demands from subcontractors and lawyers and claims from other condo owners over bad construction.

Maclean’s condo contractor, Développements TGB Inc., is owned by Pierre Tremblay, Jules Gagné and Hossein Bayat Makou.

The company has no offices and does not hold a contractor’s licence with the Régie du bâtiment. Its address is listed as 507 Place d’Armes, Suite 1524 – a business centre where various professionals share space and a receptionist.

When The Gazette visited the office, the receptionist said TGB doesn’t have any space there. She said she takes messages for the company and for Hossein Bayat, who also lists the centre in the company registry as his residential address. She said he occasionally comes to the office to collect his messages. She claimed not to know his phone number.

TGB’s second owner, Pierre Tremblay, claims to live in an apartment above a store at 3455 Ontario St. E. But when The Gazette rang the doorbell, a woman appeared who refused to say whether he lived there. She simply said, “I’m not Pierre Tremblay,” volunteered his cellphone number, and closed the door.

When The Gazette contacted Tremblay on his cellphone he said there was nothing he could do to help the condo owners “because I haven’t been with that company (TGB) for two years.”

“It’s too bad what has happened, but I wasn’t the manager of that company. Other people ran the company.”

Asked why he left the company, he replied that “I wasn’t interested any more. You have choices to make in life. You should ask the 50 per cent of Quebecers why they left their wives. It’s the same thing. It’s not complicated.”

Asked how he could have erected a building so poorly constructed it had to be condemned, he said that the case is currently in court and “there are things that I can’t divulge.”

He said the real issue is that the New Homes Guarantee plan refuses to honour the guarantee.

“The APCHA have been ordered to do the work because there is a guarantee and the owners have paid for that guarantee.”

He added: “I’m not responsible.”

He said the problem occurred because a water leak weakened the aspenite joists. “There were no hidden defects,” he claimed.

He said that another person at TGB was in charge of construction, but he refused to name that person even though he said it was the only person in the company who had a licence.

“I don’t have a general contractors licence. Mr. Bayat doesn’t have a general contractors licence.”

Asked to list his experience in construction, he said: “It’s none of your business.”

He said he “didn’t make a penny” from the condo projects. “We still have $5 million in condos that we haven’t sold,” he said.

According to the Régie du bâtiment, the only one of the three TGB owners who has a contractor’s permit is Jules Gagné. The permit is held in the name of his company, Jules Gagné Métal Inc., which has a small workshop at 7200 Arthur Léveillée St. in east-end Montreal.

But it is not clear whether Gagné still owns this company. The company registration names him as a shareholder and company president. But when The Gazette visited the company’s workshop, Roger Henripin, who is named in the registration as the vice-president, insisted that he owned the company and that Gagné hasn’t owned it since he began building condos.

“Jules works for me as a salesman getting contracts,” he said.

TGB’s office used to be at the metal company workshop, Henripin said, but it moved last year to the building in Place d’Armes.

Jules Gagné Métal makes and installs metal staircases and platforms, he said.

According to the Régie, Jules Gagné Métal’s contractor’s licence allows Gagné to construct “buildings of all kinds” including new homes, as well as perform specialized work such as installing foundations, marble and ceramics, pre-cast concrete, windows and doors, insulation, heating systems, counters and cabinets, ventilation systems for residential buildings and communications systems like telephones and surveillance equipment.

The poor and, in the case of the St. Ferdinand building, dangerous quality of TGB buildings, however, raises the question of whether Gagné has the expertise to do the work for which the government has granted him a licence.

Gagné was on holiday in Italy and couldn’t be reached for comment.

Maclean’s condemned building in St. Henri is not the only TGB condo project that has run into trouble. Out of the three TGB has built since 2002, all of them have turned into nightmares for the owners, although not quite as bad as Maclean’s building – at least not yet.

Jean Rivard, head of the condo association for the three buildings TGB constructed in 2008 on des Tilleuls St. in St. Bruno, said he has been fighting since that time to save the concrete terraces that run along the rear of the buildings from collapsing into the underground parking entrance.

“They didn’t install a proper membrane to stop water infiltration,” he said. “Now when it rains, the water floods through the concrete to the parking entrance compromising the structure of the building.”

He said the brick chimneys, which are fake, leak because they have no covers on them. The brick sits on thin plywood, which is warping under the strain. So the chimneys are sinking into the roof. In all, he said, there are about 50 problems with all the buildings that have to be corrected. The estimated cost is more than $600,000, he said.

But despite the fact that his association has won two arbitration decisions ordering TGB to make the repairs, so far the company has ignored them.

“None of the work has been done,” he said. “Caulking was installed on my chimney and they couldn’t get the colour right. They put in red, green and grey caulking. But caulking wasn’t the problem. The chimneys need to be rebuilt.”

Rivard said that TGB never notified the condo association that the work had been completed. So in 2008, the condo owners initiated the process by hiring an inspector. The inspector spent a week examining the buildings and came up with 120 problems, including the fact that the terraces had to be rebuilt.

Owners of condos in a third TGB building on Waterman St. in St. Lambert have had an identical experience. They, too, discovered that their concrete terraces were improperly installed and in danger of collapsing unless they were rebuilt. Rebuilding finally began last week.

When The Gazette inspected the building, which is the former Waterman fountain pen factory, piles of dirt and brick were still heaped around the terraces. Pools of water had accumulated on the bare concrete, there were no protective railings and there was a gap of about three feet between the bottom of the metal stairs and the terrace.

One owner, Jay Mann, who paid $495,000 for his condo, said in a court declaration that he and his wife have waited five years for the terrace to be completed. He said the project had been sold as “luxury condos” with promises of high-end cabinetry, wood flooring and private terraces. He said he didn’t get any of that. He said the cabinets he got were so badly marked he had to pay to have them refinished. He also had to replace toilets that clogged and insulate noisy plumbing. He claimed water leaked into the underground parking area and he has had to spend $876.25 to repair body damage to his car caused by the narrow parking spaces, which he said don’t meet the building code.

He said owners at the Waterman condos have been unable to sell their units, which he claimed are essentially worthless in their present condition.

Mann is suing TGB for $151,333.52 in damages.

Years after discovering the faults, the owners of TGB’s condos are still fighting for compensation.

They have to pay mortgages and taxes and chase after a government New Home Guarantee program that either is slow to pay up or fights them at every step of the way.

Rivard said that the Régie appears to have little power to force contractors to repair their bad construction.

Veillette said the Regie can cancel a contractor’s licence and even sue contractors if they don’t do the required work.

But Rivard said that his experience shows that contractors don’t care.

“The developers feel quite free to do whatever they want,” he said.

wmarsden@montrealgazette.com