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In Ontario, a property manager who moved $500,000 from condominium reserve funds to an alleged cryptocurrency investment firm called Pink Piggy Investment Group Inc. has lost his license to oversee condominiums.
The decision highlights the importance of financial and legal responsibility in condominium management. Some individuals are urging the Condominium Management Regulatory Authority of Ontario (CMRAO) to use this case as a reference point to address significant issues within the industry.
Robert Weinberg, CEO of Percel Inc., a condo management company, expressed satisfaction with removing unethical individuals from the sector. He emphasized the need to focus on similar issues to uphold standards of integrity and professionalism.
The process to revoke Norbert (Bert) Berger’s license began with a suspension by the CMRAO on Oct 12, 2023, subsequent to an investigation triggered by a Globe and Mail article on Sept. 20. The article detailed the allegations against Berger and his company, L & H Property Management Inc.
The ruling on April 5 by Colin Osterberg, Vice-Chair of Ontario’s Licence Appeal Tribunal (LAT), decisively assessed the evidence against Berger. Osterberg expressed doubts about Berger’s future compliance with the law and ethical standards.
The grounds for revoking Berger’s license included violations of The Condominium Act related to conflicts of interest and approval procedures. Osterberg found that Berger breached section 52 of the Act, which mandates managers to disclose any personal interest in a transaction to their clients. Additionally, Berger violated section 32 of the Act, which prohibits managers from engaging in transactions where they have a personal interest without written approval.
Although Berger claimed no financial stake in Pink Piggy’s $500,000 transfer and denied receiving any benefits, Osterberg dismissed this assertion. He questioned Berger’s involvement as the chairman of Pink Piggy’s board and a shareholder without expecting any form of compensation.
Osterberg also raised concerns about Berger’s failure to seek approval from the board of York Condominium Corporation No. 25 for the transaction. Testimonies revealed that some board members were unaware of Berger’s association with Pink Piggy, indicating a lack of transparency in the dealings.
Berger’s argument that silence from the board implied consent was refuted by Osterberg, who emphasized the necessity of explicit approval in such transactions.
Despite Berger’s claim that the cryptocurrency investment complied with regulations, Osterberg found discrepancies in the investment’s eligibility under the law. The submission to YCC No. 25 contained misleading information about Pink Piggy’s compliance, indicating a lack of transparency on Berger’s part.
While Berger asserted that the funds were returned in full, Osterberg highlighted the lost opportunity for the condo to earn investment income during the period the money was with Pink Piggy.
The CMRAO emphasized the importance of preventing illegal investments that jeopardize condo owners’ interests. The regulatory body plans to introduce additional guidelines and enhance inspections to deter similar incidents in the future.
However, some industry experts caution that condo managers are facing increasing challenges, including concerns about safety, burnout, and regulatory pressures. Complaints filed with the CMRAO, ranging from serious issues to trivial matters, are creating additional burdens for managers and boards.
Bradley Chaplick, a legal expert in condominium matters, raised concerns about the CMRAO’s handling of complaints, suggesting that some grievances lack merit and are driven by personal vendettas rather than genuine concerns.
In summary, the case involving Berger underscores the need for transparency, accountability, and adherence to regulatory standards in condominium management, while also highlighting the challenges faced by professionals in the industry.