Foreclosure looms over three Penticton motels unless debts settled | iNFOnews | Thompson-Okanagan's News Source

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Foreclosure looms over three Penticton motels unless debts settled

The three Penticton motels that have been placed into receivership are all on Parkview Street near Skaha Lake.
Image Credit: SUBMITTED/Google Maps

A Vancouver company that owns three motels in Penticton is hoping to settle its debts before creditors foreclose its properties.

Three aging motels on Parkview Street near Skaha Lake will be foreclosed Jan. 8 if $5.5 million in outstanding payments are not dealt with, according to a B.C. Supreme Court judgement, Nov 29.

The unpaid mortgages came from the Sunny Beach Motel, Waterfront Motel and Beachside Motel, which are owed by Portliving, a real estate business from Vancouver. The money is owed to the Prospera Credit Union and a receiver, Bowra Group, was appointed in last month’s decision to oversee operations of the motels.

READ MORE: Penticton to pay vulnerable woman $140K for selling her home for unpaid tax bill

The respondents argue against the appointment of a receiver. They cited how the redemption period is active until Jan. 8, they have evidence to suggest they will be able to secure funding, and the appraisal value is three times the petitioner's interest.

In the decision, Portliving CEO Toby Reyes said on Sept. 16 that the respondents were planning on refinancing the mortgages, and in a sworn affidavit he exhibited a commitment letter from an investment group about repaying a $5.5 million loan "in the near future.”

In a subsequent affidavit on Nov. 10, Reyes said financing had not yet been secured but he was confident it would be. He added that the respondents intended to develop the properties into condos, and would rely on cash flow from the motels in the process of redevelopment.

But Justice Karen Horsman wasn’t buying it.

“The evidence does not establish that the appointment of a receiver at this stage would have a significant additional dampening effect on the respondents' efforts to refinance,” reads her ruling.

She was critical of the respondents for failing to provide financial information to the petitioner that was contractually obligated to be shared, which related to concerns about the general financial viability of the motel businesses.

Furthermore, concerns about the property having outstanding debts with the Canada Revenue Agency were not property addressed by the respondents.

“I find that the appointment of a receiver is necessary to allow the petitioner to effectively protect the value of its security,” said Justice Horsman.

READ MORE: How to ease out of mortgage forbearance, avoid foreclosure

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