Barnfield residents are taking the municipality to court because they say the rules that govern the resale price of their homes are unclear.
The owners of 16 homes in the 23-lot employee housing neighbourhood are asking the court to decide if the price restrictions on their properties are legally enforceable. If the court decides they aren’t, the residents would be allowed to sell the properties at market value or use the equity built up in the property.
Some residents, 24 of whom are named in the petition, were reluctant to speak to Pique Newsmagazine this week to explain their position.
They did, however, forward a group statement on Wednesday morning.
"After much careful consideration the Barnfield Homeowner’s Association, comprised of the majority of the homeowners in Barnfield, have commenced legal action against the RMOW… The residents of Barnfield have tried without success for the past eight years to resolve many issues that relate to the care and keeping of our homes as well as other issues raised by the employee housing covenant. We had hoped that these issues could have been resolved without having to initiate such action."
Those named in the court document are: Dagmar Roth, Mike Knapton, Sharon Card Iles, Glen Iles, Bernadette Lalor-Morton, Robert Morton, Sean Bondaroff, Eric Berger, David Krasny, Lisa Krasny, Simon Kelly, Tegan Ross-Kelly, Scott Patterson, Jennifer Patterson, Duane Kercher, Sandra Makarewicz, Alex Kleinman, Rod Cochrane, Louisa Cochrane, Tim Brooksbank, Jackie Brooksbank, Jose Picard, Dave Sharpe and Shelley Sharpe.
The homeowners’ petition was filed in the Supreme Court of British Columbia on Nov. 4.
Along with the Resort Municipality of Whistler, the residents are also taking legal action against the Whistler Housing Authority.
Municipal spokesperson Diana Waltmann said council was made aware of the lawsuit immediately. She said the RMOW would defend its employee housing covenants in the courts.
"We will vigorously defend our program… so that we can continue to provide and maintain our resident housing," she said.
The Barnfield development dates back to 1997 when 23 lots were put into a lottery and names were drawn to see who had the chance to buy a price-restricted piece of land in Whistler.
The lots were deemed "affordable" and cost roughly $78,000 each, along with $12,000 for servicing costs.
The homeowners were allowed to build their own homes on these lots and were then asked to produce receipts for all their costs of construction so that a "base cost" could be established.
Disputes arose over the costs of construction.
An ad in Pique Newsmagazine dating back to October 1996 calls on employees to apply for the lottery and states: "The lots will be subject to a housing covenant which restricts resale prices."
Essentially what that means is that a house built in Barnfield for $300,000 plus the roughly $100,000 cost of the lot, would now be worth $440,000. In other words it would have gone up in value just $40,000 in the last eight years, unlike other Whistler real estate which has soared in value because it is unencumbered by restrictions.
The Barnfield escalation rate is tied to the prime rate, just as other employee housing projects in Whistler are tied to the same formula. With no price restrictions, the property would be worth at least double.
In his affidavit before the court homeowner David Krasny said:
"I do not agree with the WHA’s interpretation of the Employee Housing Covenant which, if correct, would restrict the appreciation of my home to a level so low that I could not even afford the cost of maintaining it."
In the Barnfield residents’ petition it states that the resale price control section in the covenant is unclear and open to interpretation. This lack of clarity, they contend, means the price resale covenant cannot be enforced.
The petition states: "When read in the context of the Employee Housing Covenant as a whole, section 3.6 and, in particular, subsections (a) and (b) of section 3.6 are not capable of a clear and unambiguous interpretation. Section 3.6 is, therefore, unenforceable."
As an alternative to this ruling, the Barnfield property owners have asked a judge to only allow the price restrictions to be applied to the land and not the buildings, which they say should be sold at fair market value.
"In the alternative, the formula in section 3.6 of the Employee Housing Covenant must be interpreted as applying only to the determination of a sale price for the bare land strata lot," states the petition. "The sale price for any building constructed on the strata lot is determined separately on the basis of market value at the time of sale."
Jim Budge is one of seven Barnfield homeowners who won the lottery in 1997 but is not part of the lawsuit. Budge has no hard feelings toward any of his neighbours. He explained that before winning the lottery he and his wife were commuting from Pemberton on different shifts.
"We were just… happy to be able to afford a house in Whistler," said Budge. "We knew that there was restrictions on it but we were just so happy to be in Whistler and we figured we were going to be here forever so we didn’t worry too much about the resale."
Former alderman, and champion of Whistler’s employee housing projects, Garry Watson, said the price cap and subsequent tie to a pre-determined price escalation formula is an essential part of the project.
He explained that a previous employee housing project, Lorimer Ridge, moved ahead without price caps because there was no political will to impose them at the time. In the end, those units, though they were restricted to employees, rose dramatically in value. Now the Lorimer Ridge units sell for around $1 million.
"It’s absolutely essential (to have the price cap)," said Watson.
"It’s absolutely fundamental to ensuring that the housing is affordable over time, that the second purchaser can afford, that it doesn’t become a sale to the highest bidder…. Without the resale price cap, it’s sale to the highest bidder."
The homeowners have hired lawyers George Macintosh and Susan Horne, better known for their successful challenge of the RMOW bylaws which were drafted for the Nita Lake Lodge development. The RMOW lost that case in court but the judge’s ruling was later overturned by the province.
