Negotiations between tenants who formed a co-op to buy their Hamilton, Ont., apartment and the landlord have hit an impasse amid allegations that some $500,000 worth of repairs will soon be needed.
Residents at 272 Caroline St. S., who banded together to buy the 21-unit building to protect themselves from rent hikes and renovictions, say a recent inspection cited issues like asbestos in the basement and cracks in the foundation and they’re seeking a reduction in the purchase price.
“We expected there would be some repairs and we were prepared to take that on,” tenant Emily Power said.
“But we were shocked by the results of these inspection reports and the scale of neglect and amount of capital investment that’s needed and overdue.”
Power says inspectors told the prospective buyers that repair costs could climb to some $2 million over the next 10 years due to a culmination of fixes including old electrical, corroded and leaking pipes, old water tanks and faulty windows.
Issues the tenants say weren’t disclosed in the original listing.
Power said “a whole host of things” makes it clear some “major investments” are needed. “The building is not up to code and it’s not safe and functional.”
Just a month ago, the potential sale was a feel-good story that came before city councillors who approved an $84,000 grant through a Ward 2 reserve fund to help residents raise their downpayment.
“It is not a sustainable model, right now, to use (reserve funds) … to do this,” Ward 2 Coun. Cameron Kroetsch said during the city’s emergency and community services committee in June.
“But in a situation like this, we’re talking about the impact of $84,000 for 21 deeply affordable housing units. The impact is incredible.”
The purchase came not long after a consultant’s report said Hamilton has lost more than 15,000 affordable rental units on the private market since 2011.
Power says the group is now seeking a “modest” reduction in the purchase price to compensate for repairs they’ll soon need to undertake.
Landlord Andrew Robertson characterized the tenant’s decision to express their demands via a media conference out front of the building on Caroline at Herkimer Street Wednesday as “regrettable” and ” a way to bully” him into “absurd demands.”
“If they don’t like the deal we agreed to, they can walk away,” Robertson said in a statement.
“It befuddles me why they think a stunt like this will help in any future negotiations, they have poisoned the process that up until this point was moving forward in a respectful manner.”
Power insists the tactic was a “last resort” suggesting the landlord has been “stubborn” in recent communications since questioning the validity of the inspection reports.
She believes the deal is still salvageable and the tenants are seeking a return to negotiations.
“We want to start this co-op in a financially responsible way,” Power said.
“All we’re asking for is a modest reduction on the price to allow us to have a little bit of a cushion to make these repairs.”