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Hearts and Hands hits back at Habitat Canada

Hearts and Hands for Homes is disputing Habitat for Humanity Canada's claim that the local group has been dragging its feet on disclosing its finances and transferring assets still in its possession to the national organization.
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Inside the Hearts and Hands for Homes The Salvage Store on Queensway that is back open two days a week Tuesday 11-4 and Thursdays 11-4. Citizen photo by Brent Braaten Nov 10 2015

Hearts and Hands for Homes is disputing Habitat for Humanity Canada's claim that the local group has been dragging its feet on disclosing its finances and transferring assets still in its possession to the national organization.

The claims, made by Habitat Canada national director of affiliate relations Cathy Borowec, were printed in a Nov. 12 Citizen story on the ongoing legal battle between the two groups.

In response, Hearts and Hands president Vivian Pylatuik sent a letter to Habitat Canada's lawyer saying Borowec's comments are not correct.

Pylatuik said all financial statements from 2012 to 2014 were sent to Habitat Canada, and the organization appears to have accepted the accuracy of the 2012 and 2014 documents but not the 2013 statement even though it was "done by an accredited accountant and in exactly the same way as the others."

As for the assertion that Habitat Canada is waiting for Hearts and Hands to transfer the property, Pylatuik said the local group twice signed transfer papers for a van after it appeared Habitat Canada lost the original paper work.

Moreover, Pylatuik said Hearts and Hands was ready to transfer the real property by the Aug. 15 deadline a B.C. Supreme Court Justice had imposed, but Habitat Canada did not provide any transfer documentation until Oct. 15, and for only three of the seven pieces of property it owns.

Those three transfer documents were promptly signed and returned, Pylatuik said, and noted the four remaining properties are subject to a mortgage.

"This [is] a mortgage your client does not wish to assume but rather, as you have advised us, it is their desire to have the bank foreclose upon it," Pylatuik said.

Hearts and Hands did choose not to sign transfer documents for the "partner family mortgages," or outstanding mortgages on the houses the local group has built for low-income families over the years, because of "unacceptable contractual obligations."

According to a separate letter to the mortgage conveyancer, at issue are requirements for Hearts and Hands to warranty the mortgages and waive its right to future litigation against Habitat Canada over the mortgages.

Borowec's comments were in a story about a move by Hearts and Hands to reopen the old ReStore on Queensway near First under a new name, the Salvage Store, after Habitat held a clearance sale and closed the facility down.

The costs of fixing a number of safety issues and making general repairs as well as its location and building layout making it not "economically viable" were cited as reasons, although Hearts and Hands differs with that assessment.

Borowec told The Citizen that Habitat Canada will be seeking an order that the store property be transferred to the national organization "so that we can control the sale of the property."

In the letter, Pylatuik said Hearts and Hands is living up to the court order, which requires Hearts and Hands to pay all debts and transfer the net assets to Habitat Canada.

"We are attempting to do exactly that by selling the building and paying the mortgage," Pylatuik said, and added all net proceeds would go to Habitat Canada. But she said Hearts and Hands is willing to sign transfer documents from Habitat Canada for the building.

"You will need to deal with the mortgagee," Pylatuik said. "We would offer to pay rent to you for our use of the building from you in order to allow your client to collect sufficient funds to pay the mortgage. At present, we are making enough money to pay the mortgage ourselves."

She added a real estate agent has been secured who is willing to list the property for sale at $625,000 to $725,000.

"We seek your agreement to list the building for sale with this realtor," Pylatuik said. "We would direct the realtor that all net proceeds received from a sale would be paid to you in trust after payment out of mortgage."

In July, B.C. Supreme Court Justice Neena Sharma found Habitat Canada was entitled to disaffiliate the local group because it failed to live up to standards the national organization had in place regarding governance and operations.

She ordered the transfer of all Hearts and Hands assets to Habitat Canada after all debts and liabilities have been paid.

Habitat Canada spokeswoman Meghan Reddick said the organization stands by its previous comment that Hearts and Hands has no right to be running or selling the store and is continuing to directly contravene Justice Sharma's order in which she declared the store properties to be assets belonging to Habitat Canada.

"At this point in time, we are feeling it is just not appropriate to carry on a legal dispute in the media, as we are taking this matter up in court," Reddick said. "What we really want at the end of the day, is to get back to doing the important work that we do - serving families in Prince George."