Red Cross to help Fort McMurray condo owners in rebuild project plagued by lawsuits

The Canadian Red Cross is helping some residents of a Fort McMurray condo project that has become mired in lawsuits and plagued by delays.

Owners in a 214-unit townhouse-style complex called HillviewPark, which was destroyed by the 2016 wildfire, thought they would have moved back intotheir rebuilt condos by now.

Instead, many are reading news stories about lawsuits plaguing the project.

Meanwhile, the board will rely on owners to help cover costs of the rebuild, according to an online message the condo board posted on an internal website for residents.

The board told owners that for the rebuild to proceed they must borrow $6 million for repairs. Each resident must pay a "specialassessment" of about $30,000.

The Red Cross hasset up a program to help residents pay those special assessments, saidJenniferMcManus, the relief agency's vice-president for Alberta and the Northwest Territories.

• Condo owners consider bankruptcy as lawsuits plague one of Fort McMurray's largest rebuilds

Because the project faces a number of lawsuits,McManussaid the Red Cross has hired a third party to administer the disbursement of money.

"So (the money) is held in trust and not going to condo board,"McManussaid. "I am not going to name the third party right now."

The condo complex is one of the largest rebuilds after the May 2016 wildfire.

In one lawsuit, the board blames its former builder, Viceroy, for "numerous issues" that arose during construction.

It alleges Viceroy was negligent in ensuring work was free from defects, was completed on time and that subcontractors were paid on deadline.

Viceroy's negligence, the lawsuitalleges, has caused the condo corporationto do substantial rework and repairs. The condo corporation is suing for $9.3 millionand other additional costs.

Viceroy responded in a statement of defence denying the allegations and said any defects and delays were caused because Hillview breached the contract in the first place.

None of the allegations in the lawsuits have been proven in court.

Not all will qualify forhelp

Some Hillview Park homeowners say they likely won't be eligible for Red Cross funding, because applicants had to have been living in the condo at the time of the wildfire and have been uninsured or underinsured.

Megan Tilley lives in Cold Lake and was trying to sell her three-bedroom unit at the time of the fire. She's still paying two mortgages and her insurance has run out.

"My current plan is to put (the assessment) on a line of credit," Tilley said. "I am going into a deep hole. There will come a point when it is not sustainable and you have to give up."

Megan Hamilton hasn't gone to the Red Cross yet but is waiting to hear if her insurance will cover the assessment costs for her two-bedroom unit.

She was renting her condo, but was living in Fort McMurray at the time of the wildfire.

"It's a hard pill to swallow, paying two mortgages," Hamilton said. "It's hard to imagine how I am going to come up with that much money."

The Red Cross urges all owners to contact them, regardless of whether they qualify.

Communication shutdown

The condo board has not responded toCBC'srequests for comment.

The board alsoinformed residents on March16 that it will cease all communication with owners, "other than what is specifically required by the Condominium Property Act."

The communication shutdown comes after the board said it had learned some residents were contemplating taking legal action against the condo corporation.

"Our focus continues to be working toward getting our homes back," the post from the board said. "We must keep our attention on completing the rebuild and succeeding or resolving the lawsuit with Viceroy."

In that post, the board acknowledged the rebuild is delayed.

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