After a major Vaughan condo development was cancelled by its builders, leaving hundreds of pre-construction buyers without a future home, customers are wondering whether the developer’s reason for scrapping the project is legitimate.
The three condo towers, branded “Cosmos” by developers Liberty Development, were slated to go up near the TTC’s new Vaughan Metropolitan Centre Station, near Highway 7 and Jane Street.
This week, hundreds of buyers who committed to the condos back in 2016 received the same letters in the mail, saying the project had been nixed because the vendor had not secured satisfactory financing.
CityNews spoke with two young buyers who both put their life savings into the development, and have now been pushed back into a real estate market they fear they can’t afford anymore.
“I recently got engaged last year in June to my fiancé. This was for us. This was something we were going to build our future with, build our family with,” says condo buyer Massimo.
He’s not alone in his disappointment. Karan Kundra put a $60,000 deposit down on a one-bedroom plus den on the ninth floor, with a parking spot. His purchase price was $330,000.
“I now see those same units are around $400,000 plus and now we’ve been priced out of the market to buy a comparable unit at a comparable price,” says Kundra.
In a letter to buyers, Liberty Development says that it recently learned “of circumstances beyond its control,” that the company says poses a problem for Cosmos Condos.
“We are advised by the project vendor that at this time, financing for this project at terms satisfactory to the vendor cannot be arranged,” the letter reads.
Bob Aaron, a real estate lawyer explains to CityNews that this legal jargon insinuates, “Satisfactory to the vender means they can get more money by putting the place back on the market at higher prices.”
Since Cosmos Condominiums was sold, the Vaughan Metropolitan Station has opened to whisk riders downtown, and it’s becoming a burgeoning transit, living and working hub in its own right.
A spokesperson for the developer told CityNews in a statement, “the cancellation of all purchaser agreements was made solely due to the inability to secure satisfactory construction financing.” It goes on to say in part that “despite the project’s sales success, the decision was made by the vendors.”
As for the pre-construction buyers, everyone has been told they will get their deposits back but that’s about it.
Unfortunately for buyers, Aaron says pre-build condos can be cancelled for a long list of reasons that are all legally acceptable.
So, who is the vendor the developer says is behind the decision to shut the project down? The Liberty spokesperson gave us a numbered company.
CityNews has found Ontario court documents that show the numbered company has the same address as Liberty Developments. A confidential source also told CityNews that the name behind the numbered company is Fred Darvish, who is also the president of Liberty Development
Liberty has multiple developments underway in the GTA that have not run into financial issues.
As for the young buyers, they’re not sure what they’ll do next, but they do feel that the market isn’t working in their favour.