Who is responsible for Condo Debts?

In Toronto we have an expanding list of condominium corporations that find themselves deep in debt they claim they did not sign up for. Apparently a single individual falsified one or more documents in each case, either of board member signatures or of self-authorizing minutes. Then this individual seems to have taken out large mortgage loans on the properties, and diverted the sums into an account he alone controlled.

Now the person and the money are missing. They are believed to be out of the country.

Today’s dumb question becomes two:

  • Who did due diligence on all this paperwork?
  • Why do we have no idea where the money went?

It appears that a case could be made that the financial institutions who approved these loans, and paid them into an individual’s account, did not do magnificent due diligence. Cynics will recall that the issuers of “NINJA” mortgages were later bailed out by government; perhaps due diligence is no longer required when handing out cash with property as collateral.

One could be forgiven for thinking that our Canadian banks, all of which are entirely electronic, could tell us (or the police) where all that money was transferred to. We might have a clue as to the country in which it next has to be spent or moved.

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