Condo buyers considering legal options after Vaughan project cancelled
Posted April 10, 2018 7:31 pm.
Last Updated April 11, 2018 10:24 am.
This article is more than 5 years old.
Upset would-be condo owners in Vaughan are considering their legal options after their future homes were cancelled.
“In real estate, time is your friend. We’ve lost two years and you can’t get that back,” says buyer Steve Fox. “Two years of investment time is gone.”
On Friday, CityNews reported on the Cosmos Condo Developments, a residential project near the Vaughan TTC station, sold in 2016, and recently cancelled.
Owners have begun getting their deposits back, with zero interest, and no further answers about what is going on.
“It was part of my retirement,” says Fox, who says he bought a two-bedroom Cosmos condo for $450,000.
Fox says the fact that deposits are being returned without any interest isn’t the big issue — it’s that he’s losing out on how much his investment condo has increased in value over the last two years. He estimates the loss to be around $200,000 dollars.
Since the condos were originally sold, property values in Vaughan, near Highway 7 and Jane Street have gone up substantially, says real estate broker Claude Boiron.
“Depending on the specific project, you can see property values having gone up anywhere from 20% to 40% in the area,” he says.
“Buyers, maybe they’re not looking for fantastic returns, but at the very least they’re upset that the dollar that they paid two years ago, the contract amount that they agreed to, very often they can no longer afford the same square footage or the same purchase price now in today’s prices,” he adds.
CityNews has learned some buyers are considering bringing a class-action suit against the builders. Many believe the reasons for cancelling the project are unacceptable.
Last week, owners received a letter from Liberty Development stating the project was canceled. Liberty said the project was cancelled “due to the inability to secure satisfactory construction financing,” and the decision to scrap it was made by vendors, not Liberty Development.
The vendor is a numbered company. A CityNews investigation has confirmed Fred Darvish, president of Liberty Development, is also associated with the vendor. A Liberty spokesperson told CityNews Tuesday that in the company’s view, the developer and the project vendor are “separate entities.”
“I am not thrilled about one blaming the other when it’s really the same thing. That shouldn’t happen and the law shouldn’t allow this to happen,” said real estate lawyer Bob Aaron.
Tarion said it has requested information from Liberty Development to review the circumstances surrounding the cancellation. Though the warranty agency said any purchasers should reach out to a lawyer if they feel the cancellation was not made in good faith.
Liberty declined a request for a full interview, saying it’s focusing its efforts on speaking with affected buyers. Those CityNews spoke with said they have yet to hear from Liberty.
Fox pointed out that buyers don’t have the option of backing out of their side of the deal.
“What if the tables were the other way around?” he said. “What if prices dropped 40 per cent. Am I able to back out? No way!”