Skip to content

Narrow screen resolution Wide screen resolution Auto adjust screen size Increase font size Decrease font size Default font size default color brick color green color
Were non-condo PRE-BUILD buyers SNOOKERED (by DISCOUNT PROMISE) out of unsecured DEPOSITS ? CBC 2022/05/02 12:36  
As usual, not legal advice

CBC Toronto has alerted to the dilemma of TWENTY-NINE ( 29 ) sets of NON-CONDO pre-construction buyers who contracted sizable DEPOSITS towards a 72 unit project in Richmond Hill.

Two apparently tell CBC they were snookered by promises of sizable purchase discounts now worth zilch.

As : "Just put up a $250,000 deposit now and you will get a $200,000 discount at closing ! !" That discount's worthless now.

Further as merely unsecured claimants in any receivership they will line up behind secured creditors ( lenders secured onto title ), the Crown and others in the NON-CONDO project’s receivership.

CBC reports that the project folded after XXXX Developments was charged by Ontario's Home Construction Regulatory Authority for operating without a licence and was later refused a licence by the provincial oversight body.

Lacking even the protection of trust provisions within Ontario's condo legislation these 29 sets of NON-CONDO would-be buyers may ( ? ) have partial recourse from TARION. But the still-unproven registration–defiance charges against the builders include failure to register under TARION too.

As a licence – lacking scenario the context is not identical to some of the more notorious abuses in which exploding values might tempt CONDO developers to deliberately repudiate 3 or 4 year old pre-construction Agreements.

And then have the chutzpah to re-market the pre-build condo units at significantly higher levels ( including to the schmucks who otherwise would only have a right to refunds of deposits at minimal statutory interest ). Corporate shells are tough to police.

Further the courts have been less than favourable to some “ loss of opportunity ” CONDO pre-construction victims where the developer-friendly legal framework & imbalances of power can make pre-construction CONDO purchases high risk. ( see also Courts rejected “ loss of opportunity ” class action CONDO project cancelled : “PRE-CONSTRUCTION buyers lose LOSS OF BARGAIN class action : cancelled MUSEUM FLTS ” )

That’s especially as to projects OTHER THAN of a reputable developer with self-generated financing and a long hard-fought reputation for ethical & financial credibility.

SNOOKERING ? CBC dug up disturbing parallel scenarios from a different project of the same general development group of companies whose various prosecutions and litigation are underway without judicial findings so far.

( minor clarification : the text suggests that the reporter is unaware that Ontario condo units are "freehold" unless units within a registered Leasehold condo like next to Ottawa's Chateau Laurier. Should have clarified those involved here "NON CONDO" development projects. )

May 2 2022 CBC To "Homebuyers set to lose unprotected deposits of up to $150K after GTA developer refused licences. subtitle : Purchasers put down a combined $5.7 million in deposits across 2 cancelled townhouse projects" by Nicole Brockbank 1.6435599
  The administrator has disabled public write access.
CBC looks at a DIFFERENT non-condo PRE-BUILD - now cancelled BUT WITH REFUNDS POSSIBLE 2022/05/16 12:21  
CBC Toronto continues its investigation into the Wild West of NON-CONDO pre-build projects.

Unlike the "IDEAL" victims above, these non-condo buyers-in-wait have just been promised REFUNDS plus SIX PER CENT interest per annum.

But only if they renounce all legal claims against the licence-denied developer of Mississauga's 45 property Longview Ravine Estates Its developer's licence was ultimately withheld.

That developer now has the chutzpah to blame the would-be buyers after some have been 3 years in limbo without a home at the contracted price range.

Before CBC shut down online commenting, more than 450 folks had something to say.(Not much in favour of the developer. Some express cynically that the real story might include getting dirt-cheap loans from would-be buyers to activate a project with bail-out to culminate in flipping site ownership for profit. And several speculate that the principals have not even left the scene, whether or not true. And call for reform . . . . . )

May 16 2022 CBC To " Buyers say Mississauga developer 'holding deposits hostage' after project went awry sub : Exquisite Bay Development Inc. says it's acting in good faith in a difficult situation ." by Angelina King
  The administrator has disabled public write access.
Regulators fine unlicensed PRE-CONSTRUCTION seller 2024/01/08 19:10  
Ontario's HCRA Home Construction Regulatory Authority has announced a fine attempted to target a B.C.- registered company whose unlicensed pre-construction condo projects left many Ontario buyers in the lurch.

Many contributors at CAFCOR like Richard Forster warned for years about the risks of the general pre-construction Wild West. Some well-established firm's products have been safe, but the victims here have different stories.

Dec 18/23 HCRA Pres Release : "Ideal (BC) Developments Ordered to Pay Fines and Restitution. HCRA to Distribute Proceeds to Impacted Purchasers" Following an investigation by the Home Construction Regulatory Authority (HCRA), Ideal (BC) Developments Inc. has pled guilty to selling a new home without a licence and other charges. . . ." - unquote fines-and-restitution/

Dec 27/23 CBC Toronto "Developer ordered to pay $180K after illegally selling pre-construction homes. subtitle : CBC Toronto previously reported buyers were collectively out millions"

( CBC quotes a lawyer's description of the fine as 'a slap on the risk' ( "wholly deficient" ) with victims predicted unlikely to recover after lining up behind prioritized creditors. )

May 2/22 CBC “Homebuyers set to lose unprotected deposits of up to $150K after GTA developer refused licences . Purchasers put down a combined $5.7 million in deposits across 2 cancelled townhouse projects” by Nicole Brockbank 1.6435599
  The administrator has disabled public write access.
lawyer BOB AARON discusses "Who's responsible when pre-construction buyers lose deposits ?" 2024/01/21 21:05  
Toronto Real Property lawyer / ToStar columnist/ frequent CBC contributing expert BOB AARON discusses the above in the Saturday JAN 20 /24 print edition of the Toronto Star.

( online access requires subscription until 2 or 3 weeks thereafter at his Columns site )

Cites that the "average" pre-construction deposit ( for the 28 homes contracted here without licensing nor TARION approval ) was $ 193 K ! Worth the read, identifies warnings or omissions missed by the victims, and calls on the Province of Ontario to make some changes . . . .
  The administrator has disabled public write access.
contact webmaster