Habitat for Humanity residents given temporary reprieve during pandemic, court battle continues

Habitat for Humanity Edmonton says it will not force dozens of low-income families to leave their homes during the COVID-19 pandemic, offering temporary relief as a contract dispute wears on between the two parties. 

The dispute began late last year, when the families say the charity presented them with an ultimatum: leave your home or sign a new agreement that changes their mortgage model from interest-free to partially financed by a credit union.

The 57 families have since banded together and retained Edmonton lawyer Avnish Nanda. Next month, Nanda will ask a judge for an injunction that guarantees the families can stay in their homes as they pursue a class-action lawsuit against the charity

But the families — roughly 300 people, including 200 children — feared the charity would still force them from their homes at the end of April if the judge dismissed their request, despite the risks posed by the virus. 

Since the outbreak began, Nanda says he asked Habitat for Humanity Edmonton to assure his clients could keep their homes at the charity’s Carter Place housing developments in Fort Saskatchewan and southeast Edmonton during the pandemic. But the charity’s lawyers turned down the request as recently as Tuesday, Nanda said.

The families then shared a statement with CBC News on Wednesday morning, urging the charity to change their position. 

“We actually don’t know what to do or where to go since some of us are laid off and our kids are at home. We are very concerned about the situation Habitat is making us go through,” the statement read. 

When asked for comment on Wednesday, CEO Karen Stone said Habitat for Humanity Edmonton would not jeopardize the health and safety of the partner families during the public health crisis. 

“To provide certainty and peace of mind to those involved in the ongoing litigation, we will be extending their tenancy agreements for at least three months and will continue to offer mediation services in hopes of reaching an amicable resolution to retain all families within our program,” the statement read. 

The charity will consider further extensions as the situation evolves, the statement continued. 

The statement was posted to the charity’s website later Wednesday afternoon. Adja Barry says it was the first guarantee her family, including four young children, would have a home during the COVID-19 pandemic.

“It was a relief for everybody. At least we can just focus on one thing now: our kids,” she said. 

God-send turned court battle

Barry and her husband are among the families who say they were promised a zero-interest mortgage, not exceeding 25 per cent of their income, to move into Carter Place. In exchange, they agreed to 500 volunteer hours of work, or what the charity calls “sweat equity,” in part to build the home. 

Low-income families otherwise unable to obtain a bank mortgage could leverage the program to build equity and then purchase a home on the market. 

“The Housing Scheme seemed like a God-send, providing us stable housing that we could call our own,” Barry said in a signed affidavit. 

But Habitat Edmonton is in financial trouble, reporting nearly $28 million in liabilities in their 2018 annual report. In an interview with CBC News last year, Stone said the charity merged staff positions and laid off seven full-time workers, but still further action needed to be taken. 

In November, Barry got a notice from Habitat. The current interest-free agreement between her family and the charity was ending. She could either sign a new mortgage scheme or withdraw from the program.  

“The Housing Scheme seemed like a God-send, providing us stable housing that we could call our own.”​​​​​– Adja Barry 

Under the new scheme, half of the purchase price of the home would now be financed by Servus Credit Union. There was no guarantee the credit union would approve every family’s lending application, and no guarantee the mortgage payments would stay below 25 per cent of their income. 

Barry estimates her family would pay $17,000 in interest over five years under the new model, if their lending application was approved. 

None of the allegations have been proven in court. 

Adja Barry in 2017 working on the construction of her future home. As part of a program to help families who otherwise can’t obtain bank financing, Habitat for Humanity Edmonton offered zero-interest mortgages to low-income families in exchange for 500 hours of work as a down payment. (Adja Barry/Supplied)

The charity has pushed the tenancy agreement back three times since that first notice, including the latest extension to cover the COVID-19 pandemic.

Barry says she is skeptical the charity would have provided the extension if the families had not gone public with their concerns. 

But Stone says the charity had always intended to offer an extension — once the injunction request was settled in court — and had communicated as much to the group’s lawyer, Nanda, on multiple occasions. 

“We remain hopeful and optimistic that these families will come to realize the significant benefits of the new mortgage model that we are offering them and that they will return to the program of affordable home ownership,” she said. 

Nanda denied the charity ever offered to extend the agreement. Rather, he says the charity told him it may take weeks or months for the charity to find other families to participate in the revised program, and the current occupants could potentially benefit from that intervening period. 

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