The term Shangri-La is defined as "a remote beautiful imaginary place where life approaches perfection".

It's a bit ironic really as Shangri-La Toronto has been riddled with issues since its construction back in 2012, largely due to the enhanced complexity of operating as a hotel with 202 guest rooms as well as a full time residence with 393 suites (many fetching several million dollar price tags).

Due to the luxury nature of the building, it has attracted some of Canada's elite from the banking & investment sectors, entrepreneurs, as well as sports & media figures + wealthy international buyers/investors.

Many of these owners saw the building as a pinnacle of luxury condo living in Downtown Toronto but lately that feeling has been reversed with one owner even saying “I have a lot of concerns for my property here now, because of bad management. All the politics… this five-star building is going to the dogs” - Zahu Ahmed ~ owner of 3 units in the building

One of the first issues that the building experienced was a drastic increase in the monthly maintenance fees which started at 55 cents per square foot back in 2012 but have since increased to 95 cents per square foot in 2020.

To put this in perspective, the current average for condos is roughly 50 cents per square foot which means residents at Shangri-La are paying almost double the city average.

While it would make sense for the maintenance fees to be marginally higher due to the luxury aspect of the building, the large discrepancy between other comparable properties can cause one to wonder whether the building is being managed properly.

The Globe & Mail has done a fantastic job on detailing all of the aspects of what has been going on in the building so I won't bore you with everything that has transpired, but if you're interested in learning more, I would definitely recommend having a read of it! (articles all listed in sources below)

To summarize what has been happening as best as possible:

  • A contentious board election happened in May 2019 which ultimately came into review by the Ontario Superior Court later in the year after 3 owners in the building challenged the election results
  • It was during this election that Mr. DaMicheli was voted as board president (currently still in position)
  • Mr. DaMicheli’s own first election to the board back in 2017 was followed by months of code of ethics negotiations regarding his ownership of Advance Group, a company that charged more than $300,000 a year to provide janitorial services in the building then and now.
  • The board pushed him to either resign his seat or divest the janitorial company, while Mr. DaMicheli filed a lawsuit against the corporation to keep his seat and his company
  • He resigned his seat rather than be voted off the board, but later obtained a court order that allowed him to run in the 2018 board election
  • In the years since Mr. DaMicheli was on the condo board, the directors of Advance Group, or 1658410 Ontario inc. has changed multiple times

Problems flared up at the building in the end of March 2020 when a dispute between the condo corporation & hotel management regarding the Central Alarm & Control Facilities (CACF) room arose due to the condo corporation changing the locks, leaving the hotel unable to access this life-saving piece of infrastructure in the building should an emergency had happened.

Toronto Police had to be on scene at the beginning of April 2020 to make sure the removal of the condo corporations lock went smoothly despite some alleged resistance from the condo board’s president, Mr. DaMicheli.

More bad news came later in the month when a letter from the Hotel’s legal team claimed that the condo board had renovated the fire pump room (shared between the condo & hotel) into its management office without the consent of the hotel.

Issues furthered this year as the woman in charge of keeping record of the condo corporation’s contracts was removed from the board without due process according to her lawyer.

Residents are now arguing that the current board is no longer a legally constituted governing entity following the slew of resignations in late 2019/early 2020 which only got worse after the Globe & Mail story that came out on June 10th, 2020, resulting in 2 more directors resigning from the board in the following week.

On July 2nd, an application on behalf of the building residents alleged the board of directors for the condo corporation lost quorum on June 17.

"The conduct of DaMicheli, Poorsina and Mousavi [the property manager] since June 16, 2020, demonstrates that these individuals cannot be trusted to manage the corporation’s affairs.”

Their application is asking that the 3 recently appointed directors be invalidated & seeks to stop the board from making decisions on behalf of the condo corporation.

A very important detail to know is that a condo board needs to have 3/5 members present to vote to operate legally.

As a result of this application, the condo corporations lawyer advised the board not to appoint any more voting members, but later that night Mr. DaMicheli arranged an emergency board meeting via teleconference and proposed Dr. Swaida, a dentist, as a new voting member.

One of the board members on the call objected to the action & left without submitting a vote, thus nullifying the the boards ability to vote due to not having enough members present.

Despite this, the new member was elected & a notification was sent out to residents regarding the addition to the board.

The next day, this was challenged as not being legal, which prompted the board member who abstained from voting to resign his position.

Several days after this resignation, 2 more board members were added in July 2020.

Despite assurances that the board would not terminate or enter into any major contracts during this time, it was shown in documents that members of the board voted to terminate the largest contract it had which was with Condor Security in the amount of $630,000.

In addition, a new reserve fund study was initiated, condo fees were raised by 2%, a new window cleaning contract was given out & negotiations began to replace the valet service provider.

The board also claims it was seeking a $300,000 rebate on a water bill, and was withholding another $252,000 from the hotel it is required to pay under a reciprocal agreement that covers the funding of amenities shared by the hotel and condo residents.

Unsurprisingly, this case has now gone before the Ontario Superior Court so we will be sure to keep you updated as the story develops.

This is a very good reminder that having a condo board which acts in the best interest of its residents is one of the most important aspects of condo ownership as it can have serious negative consequences on the value & reputation of the building if things are not managed properly.

What would you do this if this was happening in your condo?
Let me know in the comments below!

Rylie C.

Sources