Sales Statistics for August in Toronto and Mississauga.

Condo Fraud Allegations Shock Family – The Star

Allegations of a multi-million-dollar fraud against a condo property manager have stunned members of his family who say they have no clue about his whereabouts.

“When I saw his picture (in the newspaper) I was shocked — shocked,” Salman Khan said in his first interview since the scandal broke. “Everything was going good. This is totally wrong.”

Khan is the oldest son of Manzoor Khan, president of Channel Property Management Ltd., who allegedly borrowed millions of dollars against at least nine buildings — in most cases without the boards’ approval — leaving potentially thousands of condo owners on the hook for the money.

The total misappropriation may exceed $20 million. Several buildings have filed civil suits against Channel and Khan. He is believed to have fled the country. Toronto police are investigating.

Some condo corporations allege Khan forged signatures and created fake meeting minutes to register a bylaw that allowed him to obtain loans without the board’s knowledge. The money was funnelled into a separate bank account.

The Star first reported http://www.thestar.com/news/article/1054140–property-manager-bilked-20m-in-condo-fraud-victims-claim the allegations last Thursday.

Until now, the family has declined to answer any questions.

Salman Khan says he doesn’t know where his father is.

“All I know is that he went to Bangladesh ’cause my mom wasn’t well. He likes to travel, he goes here and there. He even went for hajj (the pilgrimage to Mecca in Saudi Arabia),” he said.

Salman, 29, said he has never worked or lived with his father.

Khan lived in a luxurious two-storey house on a corner lot in north Brampton where four video cameras monitor the premises. At least two of his children are still believed to be living there.

Salman lives in a run-down high-rise with unreliable elevators in the Kipling Ave. and Albion Rd. neighbourhood.

He owns and runs Super Shawarma Wrap at the Albion Centre with his wife, Jesmin.

On Monday, he appeared relaxed while preparing a chicken shawarma for a customer as he chatted with two Star reporters.

Salman said he last saw his father before he left Canada in mid-August and spoke to him on the phone Aug. 30. He would not say where his father was phoning from. “I don’t know nothing.”

“These are only allegations, the truth will come out,” Jesmin said.

Meanwhile, multiple sources have confirmed that Khan has two wives. They are both reportedly in Bangladesh while his five children are still in the Toronto area.

He has a son and daughter — Salman and Sharmin — from his first wife, and a daughter, Shabnam, and two sons, Asif and Akash, from his second wife.

Sharmin worked for her father at Channel, say former employees, while Asif runs a high-end clothing store in Woodbridge, just down the road from where Channel was evicted from its offices last week for not paying rent.

Even as rumours about Khan’s whereabouts swirl — he is believed to be either in his native Bangladesh, Malaysia or Dubai — the list of condominium corporations he allegedly defrauded is growing.

The condo board at 2121 Roche Ct. in Mississauga learned of alleged fraud in late August when the building’s property manager from Channel notified them of “financial irregularities.”

A title search revealed that $1.2 million was borrowed against the property on May 15, 2008.

Even more curious was that someone had been making monthly $15,000 payments on the loan.

A board member said $900,000 is still outstanding on the loan.

A new property management company is expected to take over in the next few weeks and call a residents’ meeting.

Jose Pedro has lived at the condo for the past four years. The retired electronics expert said he is eager for more information.

“It strikes me as very strange that this seems to have happened in 2008 and nobody noticed it until now,” he said.

Sobia Tahir learned of the allegations last week when an unsigned letter was slipped under the door of the two-bedroom suite she shares with her husband and three children.

“Everybody is worried about what will happen next,” she said.

If you have any tips on this story, contact raulakh@thestar.ca or dzlomislic@thestar.ca

Properties affected by the alleged fraud

1. 25 Grenville St., Toronto

2. 5 San Romanoway, Toronto

3. 3050 Ellesmere Rd., Toronto

4. 39 Kimbercroft. Ct., Toronto

5. 10 Markbrooke Lane, Toronto

6. 2121 Roche Ct., Mississauga

7. 236 Albion Rd, Toronto

8. 2465 Kipling Ave., Toronto

9. 3025 The Credit Woodlands, Mississauga

Source: The Toronto Star (http://www.thestar.com/news/article/1056432–condo-fraud-allegations-shock-family)

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Toronto Wary of Condo Correction

TORONTO—A condominium-building boom is lifting Canada’s largest city into the same stratosphere as London, Sydney, Vancouver and Miami, but deepening the worries about a potential tumble.

Buyers snapped up 1,986 condominiums in Toronto in July, up 28% from a year earlier, according to the Canadian Real Estate Association. Average prices have surged 8% to 9% a year for the past five years, climbing to 304,000 Canadian dollars (US$306,900).

Rows of sparkling condo towers line the shores of Lake Ontario, while cranes dot the inland skyline near the tony neighborhood of Yorkville, a magnet for visiting pop-music and Hollywood celebrities. In May, a local real-estate developer announced that an undisclosed foreign buyer paid a record C$28 million for a sprawling unit in a tower of luxury condominiums anchored by a Four Seasons Hotel.

Juwan Howard, who plays for the Miami Heat of the National Basketball Association, recently toured the city by helicopter with Toronto-born teammate Jamaal Magloire, looking to buy a condo as a second home or investment.

“I’ve been hearing a lot about the Toronto market,” Mr. Howard says. “I’m impressed by the fact that this market has been able to do so well despite what the U.S. market has done.”

In Miami, an invasion of foreign buyers inflated a speculative real-estate bubble that burst disastrously. Condominium values plunged, foreclosures soared and glitzy condo developments stood half-empty. Now, sales are rebounding because of bargain hunters, some of them from Canada.

Toronto is a long way from Miami, but the condominium boom north of the border has begun to evoke ominous comparisons, even among real-estate agents. The Toronto area is home to 1,198 condo projects with 210,000 units, according to research firm Urbanation.

About 40,000 additional condominium units are under construction, including 16,000 set to hit the market next year. “There’s more supply coming than the market really needs, unless we have a stronger economy than we have today,” says independent housing economist Will Dunning.

In June, Bank of Canada Governor Mark Carney warned that the “ample pipeline of developments…and heavy investor demand reinforces the possibility of an overshoot in the condo market” in Toronto and other cities like Vancouver.

Toronto’s condominium-sales volume and average sales price slipped 2% in July from June, the Canadian Real Estate Association said. Prices still are rising faster than rents, hurting buyers who lease their condos to renters rather than live in the units. If too many squeezed buyers decide to sell, even more supply would spill into the market.

Low interest rates and a resilient economy are boosting property values throughout Canada. High commodities prices have supported rises in some of Canada’s oil and mining hubs, like Calgary and Saskatoon. Real-estate prices are soaring in Vancouver, propelled by non-Canadian, especially Chinese, buyers.

Last week, the Canadian real-estate trade group boosted its sales forecast for Canada’s housing market.

Toronto has always had some of the steepest home prices in Canada, but the condominium boom is an eye-popping twist. Located about two hours by car from Buffalo, N.Y., Toronto still is dominated by neighborhoods of semiattached or stand-alone homes, much like cities in the Northeast.

About 60% of new-home sales in Toronto in the first half of 2011 came from condominiums, according to the Building Industry and Land Development Association. “It’s a crowded skyline now,” says Gary Wright, head of Toronto’s planning division.

Sales in the past three- and six-month periods were higher than any previous period, according to consulting firm RealNet Canada Inc.

Toronto real-estate agent Hunter Milborne says many of his high-end clients come from India, Pakistan, the Middle East, Europe and China. Many foreign buyers pay cash, according to real-estate agents, allowing them to avoid the conservative lending restrictions at Canadian banks.

Under new rules imposed last year, investment buyers who want government-backed financing must make a 20% down payment.

As many as 60% of recent condominium buyers in Toronto are investors who bought their units from developers before construction began—and then sold their condos, Urbanation estimates. “A lot of people, in the last five years particularly, have made a lot of money just flipping condos,” says Andrew La Fleur, a condominium broker with RE/MAX LLC.

But buyers whose condominiums are investments are getting squeezed. Stagnant rents make it harder to cover mortgage payments. And many economists expect Canada’s interest rates to move higher by the first half of 2012. Higher rates would pressure some investors to sell and hurt demand from first-time condo buyers.

“The longer we are in this superlow interest-rate environment, the greater the potential for a big correction,” Mr. La Fleur says.

Have a Great Day!

Michael