Complications intensify as housing co-op struggles with insolvency

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Coquitlam’s Hoy Creek Housing Co-operative has been in financial difficulty for years. Consisting of 97 apartments and 60 abandoned townhouses, the corporation owes the Canadian Mortgage and Housing Corporation (CMHC) over $4.2 million, including mortgage arrears of $300,000.

By August 2016, Hoy Creek had failed to pay in response to a CMHC demand for repayment of the arrears. After fire broke out on August 3, 2016 in one of the property’s townhouses, CMHC jumped into action and successfully petitioning Hoy Creek into interim receivership.

Urgency over the “most horrendous housing” in Coquitlam

Over the last two years, Hoy Creek had been planning to subdivide its 157-unit property and sell the townhouse portion to a developer. The aim was to free up some of the land’s estimated $20 million in value in order to pay off its total debt to CMHC and make repairs to the still-inhabited apartment buildings.

But one day after the townhouse fires, Mayor Richard Stewart emailed Hoy Creek, describing the co-op as the “most horrendous housing” in Coquitlam, and expressing the likelihood that the City could pass a resolution to demolish the townhouses and place a charge on the property’s title to cover the associated costs.

That’s when CMHC – alarmed that the charge to the property’s title would result in a loss of priority for its mortgage security – acted to petition Hoy Creek into interim receivership. Hoy Creek objected, taking the position that the costs and delays associated with the action would effectively impede its plans to sell the townhouse property and repay the $4.2 million dollar debt to CMHC.

In a bid to stave off the receivership, Hoy Creek offered to immediately engage the services of a security company to keep watch over the dilapidated townhouses. But for the judge, it was a case of ‘too little, too late’. Given the urgency of the situation regarding the dilapidated townhouses, the judge granted interim receivership and stated that the issue of full receivership may need revisiting if Hoy Creek’s efforts fail to prove timely or adequate.

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