Developers cancel pre-sold condo projects
April 17, 2018
Langara West in Vancouver: sold-out project killed after prices soared.
High construction and financing costs are being blamed as a string of pre-sold condo projects in Ontario, Alberta and British Columbia have been cancelled by developers before buyers get a chance to move in.
The latest is in Vaughan, Ontario, where 1,100 buyers who paid deposits have been told by developer Liberty Development Corp. that its Cosmo condo project has been cancelled. Refunds will be given, but many buyers complain that they cannot buy a similar unit for the price they were promised at Cosmo, where two-bedroom units were priced at around $385,000 when they pre-sold two years ago.
In a statement to Global News, Liberty stated, “The cancellation of all purchaser agreements was made solely due to the inability to secure satisfactory construction financing. Purchasers have been advised that any deposits collected to date would be returned, in full, in the days to come.”
Other new condo projects that have also been cancelled include:
• A 10-storey Toronto condo development by Castleploint Numa, called Museum FLTS, killed last year with pre-sale deposits returned with a bonus. Castlepoint Numa blamed delays in obtaining the necessary approvals, building permits and financing, as reasons for the halt. “Recently, the industry has been experiencing the most significant cost increases in a decade,” the developer said in a post on its website.
• In Edmonton, Toronto developer Brad Lamb has cancelled the 37-storey Jasper House condominium tower, where about half of the 240 units had been pre-sold. The project has been stopped since 2015. Refunds will be given to buyers and Brad Lamb has said it does plan to eventually complete a high-rise condo project on the site.
• In Langley, B.C. a Supreme Court judge has allowed the developer of the Murrayville House condo project to resell condos that had been pre-sold to buyers to cover the developer’s outstanding debts. The 92-unit project completed last year but was forced into receivership. Dozens of pre-sale buyers put down deposits for units in 2015 and 2016, but have never moved in. According to court documents, the condos are now worth 46 per cent more than pre-sold buyers agreed to pay. The pre-sale buyers will be offered rights of first refusal on the units they had selected, but will have to pay current market prices.
• In Vancouver Vivagrand Developments has cancelled its sold-out, 72-unit Langara West project and frankly said it plans to sell the site instead. Pre-sale buyers paid an average of $850 per square foot, but similar new luxury units in the Cambie area now sell for up to $1,400 per square foot. Vivagrand said it will return deposits, but some frustrated buyers are taking legal action. One lawyer suggested the developer could be forced to pay buyers the difference between former and current prices.
• Jago Development has told pre-sale buyers of its Westbourne Residences condo project in New Westminster, B.C., that they will have to pay 15 per cent more for their units to cover “unforeseen cost overruns.” If they don’t agree, deposits will be returned and the units re-sold.