What happens after a condo corporation has been defrauded of millions of dollars? Raveena Aulakh of the Toronto Star recently provided an update on the plight of unit owners whose condo corporations were victims of a massive fraud orchestrated by a former manager.
The units owners have seen the market value of their units plummet, while the costs of living there have increased. Most of the defrauded condo corporations have had no choice but to impose special assessments on the owners, which unfortunately may be the first of several special assessments. In many cases the funds generated from the special assessments are being used to fund lawsuits against those thought to be responsible for the fraud.
Ms. Aulakh reported that some owners are suing board members who the owners felt should have been more diligent. As the fraud was committed with forged signatures without the knowledge or complicity of the board members it will be difficult for those owners to establish that the directors did not meet the standard of care required under the Condominium Act.
For more infomation about condo fraud, refer to our earlier blog postings, Fraud in Condos - ACMO/CCI Conference, Condo Fraud and Management Company Defrauds Condo Owners.