A history of Alberta condo evacuations: Owners of Castledowns Pointe aren't alone
'Building standards haven't been enforced,' says advocate for buyers
Ordered to pack a bag and leave without delay, residents of a northwest Edmonton condominium building now face an uncertain future.
Engineers investigating after a fire in March of this year discovered Castledowns Pointe, an 83-unit wood-framed structure built in 1999, is structurally unsound.
Dangerous framing, twisting trusses and weak foundations have left the four-storey building at risk of collapse.
Inspection reports revealed that its actual construction didn't match the architectural designs on record, and that parts of the 24-year-old structure have started to show signs of failure.
It's a case of history repeating. Serious problems with condos in Alberta continue to surface. Experts say the latest case is a cautionary tale about the legal risks faced by buyers, and that it demonstrates a need for greater regulation.
In just over a decade, several hundred Albertans have been forced out of their condos in high-profile evacuations. Previous cases provide a troubling blueprint for the challenges ahead for the displaced residents of Castledowns Pointe.
Anand Sharma, a condo manager and president of the North Alberta chapter of the non-profit Canadian Condominium Institute, said the evacuation at Castledowns Pointe gives him a sense of déjà vu.
Alberta's legislation needs more teeth to hold builders accountable and protect consumers, Sharma said. While hundreds of owners and tenants have been evacuated over the years, thousands more owners have been saddled with costs associated with repairing shoddy construction.
"Building standards haven't been enforced," Sharma said. "Albertans need a surety that their homes are safe."
Here are some examples of condo building evacuations in Alberta in the last dozen years:
Penhorwood, Fort McMurray
In 2011, more than 300 people were evacuated on a cold March night after inspectors determined the 168-unit Penhorwood condo complex was structurally unsound. Just before midnight, all residents of were ordered out on 30 minutes' notice.
The evacuation triggered a $60-million lawsuit against more than 28 defendants, including the companies that built the complex, the architect and engineering firms that designed it, and the municipality that approved it.
"People were literally left scrambling," Christine Burton, a lawyer who owned a unit in the building said in a recent interview. "They left with the clothes on their back.
"We evacuated Friday and just before midnight on Sunday one of the buildings actually collapsed onto a gas line.
"The land under the buildings was never prepared properly, so the buildings were literally sinking into the ground."
Litigation dragged on until final settlements were approved in 2017. The details are sealed by an order of court.
The seven buildings that made up the complex were razed in 2015 and the land sold to a developer. The site, in Fort McMurray's downtown, is still vacant.
Burton, who was president of the Penhorwood condo board at the time of the evacuation, said that despite the settlements, many owners faced financial ruin. Some continue to pay their mortgages. Others faced foreclosure.
Bellavera Green, Leduc
In early 2012, about 150 residents of the Bellavera Green condos in Leduc were ordered out because of serious fire-code issues. A complicated financial battle followed.
An inspection found safety-code deficiencies including a faulty fire alarm system, unsafe fire access route, and an open and unsecured construction site.
Through a receivership order, control of the property fell to a property management company that was given the power to borrow up to $1 million to bring the building up to code. The condo was sold out of receivership in March 2013.
Kensington Manor, Calgary
In November 2017, 125 residents of Kensington Manor in northwest Calgary were ordered to evacuate over structural concerns with the building. Attempts were made to shore up the structure with 800 trusses but residents were never allowed back. The building was demolished in late 2018.
Riverview Estates, Fort Saskatchewan
In August 2019, residents of Riverview Estates, a 44-suite condo complex in Fort Saskatchewan, were ordered to leave their homes after city officials determined the building was structurally unsafe.
An engineer determined the building was seriously "compromised." Residents were eventually allowed to return.
Little legal recourse
Burton said there is little legal recourse for condo owners who discover their homes were poorly constructed. Because condos are private property, the legal onus is on owners to pursue damages and to pay for the repairs necessary to bring unsafe buildings up to code, she said.
Owners at Castledowns Pointe will have to decide whether their homes are worth saving and whether they're prepared to pursue a costly legal battle that may never make them whole, Burton said.
"It was a very long, expensive and emotionally traumatizing process," she said about Penhorwood. "My heart goes out to [Castledowns Pointe owners]. There is no simple solution here."
Burton said more enforcement and oversight is needed in the construction phase to ensure condos are safe.
"Condos are a very convenient way of living ... But people deserve to have a good quality product and a home that's going to last."
Edmonton lawyer Hugh Willis, who represents the Castledowns Pointe condo board and the owners at Riverview, said lawsuits involving substandard condo construction are difficult to litigate.
He said the Castledowns Pointe case will be further complicated by the passage of time. The building was constructed in 1999, so his team will need to carefully investigate if the case meets the statute of limitations, he said.
Legal battles for damages are further complicated by ownership structures often involved in large construction projects. Developers often create a new, separate corporation that they use to purchase and develop a property, and then dissolve the company once the project is complete.
The manoeuvre limits the parent company's liability and can create hurdles to owners looking to collect damages, as these single-purpose corporations are considered legally separate entities.
Terry Gibson, president of the Condo Owners Forum Society of Alberta, said too often the courts are a losing game for both sides. He expects most owners would struggle to afford either repairs or a legal battle.
"When you get into construction and it's long-term, it becomes very difficult because the owners are responsible and there's very little recourse to others," he said.
"In some respects it's like driving a 20-year-old car and having trouble. Sometimes it's your responsibility, whether you like it or not," he added.
"In a building that was built in 1999, I think its very, very difficult ... I hope that the condo [board] is wise to to get really clear on what they can control and what they can't. Unfortunately, there's a lot here they can't control."
Provincial rules
In a statement, the Alberta government said it has improved consumer protections through a new-home warranty program and stiffer penalties for builders.
The New Home Buyer Protection Act, which provides residential homeowners with protections for building deficiencies, came into force in 2014.
Stronger penalties, in effect since 2020 under the Safety Codes Act, mean builders can be fined from $15,000 to $100,000 for a first offence, and up to $500,000 for a second. Infractions can include interfering with the work of a safety officer, or any contraventions of the act.
The province also extended the prosecution period under the Safety Codes Act from six months to three years, with the period beginning when evidence of the offence first came to the attention of a safety codes officer.
"We are in touch with the City of Edmonton to assist as needed and safety codes experts with the Ministry of Municipal Affairs will be helping the city and professional engineers with the building assessment," the province said in a statement.
"Albertans deserve to know their homes are safe and built to high standards and that is why the Alberta government created the new-home warranty program and implemented builder licensing."
In 2021, Alberta removed requirements for building assessment reports for new condominium developments. Under the previous policy, consultants were charged with closely monitoring new condo construction and drafting a report that outlined any deficiencies with a building.
Removing the requirement was touted as a red-tape reduction strategy.
The 'Wild West'
Sharma said milestone inspections should be mandatory at every stage of construction to ensure unsafe properties are never occupied.
The current system, he said, relies too heavily on developers to abide by building and safety codes, and developer deficiencies are not being caught until it's too late.
He notes that at Castledowns Pointe, construction flaws were only uncovered after a fire damaged part of the building.
"It's a little bit of the Wild West out here," he said.
Greg Christenson, a past president of the Canadian Home Builders Association and of the CHBA's Edmonton chapter, said the Castledowns Pointe case and other evacuations are reminders of the risks to buyers.
He said the complexity of constructing condo developments makes them particularly susceptible to deficiencies and consumers need to do their research.
The inspection process is less rigid than many believe, Christenson said. At Castledowns Pointe, the city did not monitor each phase of construction.
Alberta's building code enforces minimum standards for fire safety, structural integrity and the accessibility of each building.
Municipalities are charged with enforcing the code but that doesn't mean they are on site through each stage.
For specific projects, developers often contract out these tasks to certified engineers and architects who take on the responsibility of performing more detailed inspections and ensuring the project is up to code.
"The building code process — the public, right or wrong, tends to assume it's there for a much broader range of issues than they actually enforce."
Christenson, who was involved in creating Alberta's warranty rules, said the policies have provided an important layer of protection that did not exist for decades.
While too much needless red tape can hurt the industry, stronger oversight would be welcomed among diligent developers who want their product to perform as advertised, he said.
"You want those regulations to apply broadly across the whole industry. Otherwise you create incentives for shortcuts and undercutting and unprofessional behaviour.
"You'll never get it perfect, but it definitely takes a lot because it's a complex, complicated industry."
The evacuation at Castledowns Pointe is a black eye on the industry, he said.
"The sad thing about it is the people who least can afford it are the ones who suffer."
ABOUT THE AUTHOR
