Condo owners caught in tangled web.
After being forced to evacuate more than a year ago, Bellavera Green condo owners find themselves out of pocket and out of home, while the developer faces a tangle of lawsuits
They’ve been left with less than nothing: lawsuits and creditors, and mortgages to nowhere.
Fifteen months after the Leduc Fire Department issued an emergency evacuation order for Bellavera Green condos, and the troubled development hit the news, former condo owners are wondering why they weren’t protected from walking into an impending financial collapse, a disaster that cost each of them hundreds of thousands of dollars.
Most had secured mortgages for at least two condos. Several bought three or four, unaware the project was helmed by a convicted mortgage fraudster.
Between 2008 and 2010, Kevyn Frederick amassed a real estate portfolio approaching $100 million, including an $18-million church property in south Edmonton, a $48.7-million downtown hotel, and the Bellavera condos, for which he signed a $25-million offer sheet. But when millions of dollars vanished, only a tangle of lawsuits remained, alleging fraud, forgery and conspiracy.
The evacuation order for Bellavera was lifted in April 2012, a month after it was placed in receivership. While the building was brought up to code, a battle over rents ensued. Only a half-dozen condo owners remained on-site until last fall, when the building was put up for sale.
The property sold in March for $16.68 million. Ram Singh, Frederick’s former business partner, received a portion of the sale.
The new owners are also principals of Ironwood Financial, one of Frederick’s main financiers for the building.
In the process, Bellavera investors lost their condo titles.
Those wishing to stay must pay rent —and mortgages — for homes they no longer own. Many who left the building are on the hook for appliances they took with them.
Former condo board president Darryl Short considers himself comparatively lucky. The 33-year-old mechanical engineering technologist still has a house in Edmonton. Unlike those who lost their only home, his loss was an investment. Like other condo owners, Short’s $444,000 disappeared after his lawyer transferred the money to Frederick’s lawyer.
Expecting to receive encumbrance-free titles to his condos, Short has instead had two years’ of financial headaches over fights with mortgage companies and encounters with the legal system.
Many claimants have refocused legal efforts on the lawyers who processed the deals. The biggest flurry is against Leslie Meiklejohn, the lawyer Frederick hired to process condo sales.
With 43 years’ experience in Alberta, Meiklejohn is best known for representing dozens of Edmonton claimants for residential-school abuse. With Bellavera, he was entrusted to give buyers clear titles and to pay off Frederick’s creditors. That never happened.
Meiklejohn is involved in bankruptcy proceedings and declined to comment “for both personal and legal reasons.”
Ironwood and other lenders have been wrangling with the Alberta Law Society over Meiklejohn’s $2-million insurance policy — the mandatory minimum for Alberta lawyers — and the possibility of additional money to cover their debts. The ALS won’t comment on ongoing cases, but it does have an assurance fund to cover cases in which lawyers misappropriate trust money. Since 2000, it has paid out nearly $5 million.
The fund may be Short’s last avenue to recoup his money, but he isn’t holding his breath.
The Bellavera Green condo morass is linked to two Edmonton properties, the Victory Christian Center on Ellerslie Road and the Crowne Plaza Chateau Lacombe, a downtown hotel on 101st Street.
Through a series of complex mortgage transactions, both buildings ended up in Frederick’s portfolio. As his cases wind through the courts, the liabilities outweigh assets. Courts put the three main properties up for sale, all for significantly less than what Frederick paid. The 47-yearold Chateau Lacombe recently sold for just $27.5 million, a little over half of the $48.7 million Frederick paid.
Mortgage companies foreclosed on Victory’s Ellerslie land. After 10 months on the market with an asking price of $14 million, a deal was approved Friday for between $6.6 million and $7.1 million. The chuch still faces a civil trial due to its other dealings with Frederick.
It’s all a muddle, except for Bellavera investors like Short, who know for sure the money’s gone, and at least for now, the mortgage payments are not.
“They sort of pulled the wool over everyone’s eyes. The lawyers, at the end of the day, are the only ones who win.”