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 ” https://ontario.cafcor.org/index.php?option=com_fireboard&Itemid=46&func=view&id=19211&catid=2#19211 )
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
https://www.cbc.ca/news/canada/toronto/gta-homebuyers-set-to-lose-millions-unprotected-deposits-
1.6435599 
