In light of the coronavirus pandemic, a group of Habitat for Humanity residents in Edmonton have been granted a reprieve from a pending lawsuit that threatens to force them out of their homes.
“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,” says a statement to reporters from Habitat for Humanity Edmonton regarding the recently granted reprieve.
According to a report by CBC News, Habitat for Humanity Edmonton has agreed to temporarily refrain from forcing 300 people out of their homes over a contract dispute. The group reportedly includes 57 families, made up of at least 200 children, who refused the terms of a new mortgage deal presented by the nonprofit home builder.
The dispute centers on an agreement Habitat for Humanity Edmonton attempted to force on the recipients of some of their homes. Under the terms of the deal, residents would be forced from an interest-free mortgage to a mortgage partially financed by a credit union.
“It was a relief for everybody,” one resident told CBC News reporters after hearing news of the temporary reprieve from expulsion from their homes. “At least we can just focus on one thing now: our kids.”
The Habitat for Humanity residents were seeking a court order allowing them to stay in their homes as a class action lawsuit over the dispute made its way through the legal system before the coronavirus pandemic began. The plaintiffs’ motion for that court order was still pending in court when coronavirus social distancing recommendation and requirements were issued.
Habitat for Humanity residents told CBC News reporters they were concerned that the judge would dismiss their order and they would have to move out of their homes as soon as the end of April. Fueling their concern was the rejection of the residents’ requests to stay in their home starting at the beginning of the coronavirus outbreak.
“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 residents wrote in a statement to CBC News as late as Monday over the failed efforts to secure an agreement from Habitat for Humanity Edmonton allowing them to remain in their homes.
According to the nonprofit, residents may be granted additional time depending on how the evolving pandemic unfolds over the coming months.
Habitat for Humanity Residence Forced to Pay Interest
According to CBC News, Habitat for Humanity Edmonton was deeply in debt when it implemented a plan that would force recipients of homes to pay interest on their mortgages. Originally, residents signed an agreement with the nonprofit requiring them to pay a no-interest loan to finance the purchase price of the home, along with 500 hours of service to the nonprofit.
Habitat for Humanity residents in Edmonton say they were taken aback when the nonprofit attempted to change the terms of that agreement in late 2019. Under the new agreement, residents would have to pay interest on 50 percent of their mortgage.
Some residents were concerned that they would not meet credit requirements issued by the credit union providing the mortgage. Others were flummoxed by what their 500 hours of service to Habitat to Humanity Edmonton meant in light of the new deal.
For its part, the CEO of Habitat for Humanity told CBC News that the previous agreements were not realistic going forward.
“We were borrowing at 4.5 per cent and lending out at zero per cent, which anyone will tell you is not a sustainable model,” she said, according to a CBC News report, while also pointing out that Habitat for Humanity Edmonton helped about a third of all families assisted by Habitat Canada in the past year.
According to the nonprofit, Habitat for Humanity residents in Edmonton never should have thought they would receive interest-free mortgages in the original agreement. Habitat for Humanity also points out that a portion of the mortgages under the new agreement will be interest-free.
Further, according to the report by CBC News, the new contracts come with a number of other cost cutting measures implemented by Habitat for Humanity Edmonton, including staff layoffs.
Habitat for Humanity residents say that requiring them to pay interest on their mortgages was not a part of their original agreement with the charity and present significant problems in their path to homeownership.
What do you think of Habitat for Humanity Edmonton’s moves? Tell us your opinion of the lawsuit and/or the temporary reprieve in the comment section below!
The Habitat for Humanity residents are represented by Avnish Nanda.
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