Buyer shares similar hefty closing cost experience at Etobicoke development

Days after several buyers came forward about shocking six-figure closing costs from Haven Developments, a buyer from another project by Haven is sharing his experience.

John Babiera bought a condo at 400 The East Mall back in February, one of the last few people to purchase a home at that location.

He said they were already capped on most of the costs for the property except for utilities and connections. “We were told by our agent that the maximum will be $5,000 because that’s the going rate for a lot of places.”

Babiera was then shocked to receive a bill for $26,000 for their utilities connection. “We were in shock because we didn’t know that utilities could cost that much.”

“Our lawyers got involved. They tried to negotiate. Our lawyer mentioned that on email the builder’s agent mentioned about they kind of insinuated that they already know the cost of it so how come it wasn’t mentioned to us,” explained Babiera.

He said he wasn’t surprised to hear the same thing happened at The Clarkson development. Several people who had bought pre-construction townhomes at the location nearly three years ago in Mississauga were forced to come up with between $70,000 and $170,000 in less than a week.

Babiera said after speaking to some of his neighbours, he found out what they had to pay even more than his $26,000 utility connection.

Wendy Moir, CEO of the Home Construction Regulatory Authority (HCRA), said people should be aware of increased closing costs, but it should be quite clear in the agreement of purchase what those closing costs should be.

The HCRA is responsible for regulating builders and developers in Ontario, ensuring they meet conduct standards under the code of ethics and that they are going to be financially viable for the projects that they take on.

“More and more what we’re seeing is municipalities charging increased costs for anything from development charges, park levees, utility installation,” said Moir. “It could definitely be a bit of a surprise in some cases if you don’t have a cap.”

If a buyer is concerned with the amount, they are being charged by the developer for closing costs, Moir said if the amount is flowing through the municipality, the municipality should have the documentation to show it is the correct amount.

She added for those in this situation, it’s a good idea to get legal advice. “Both to understand whether they are being charged the right amount under those contracts because those contracts can be quite long and complicated,” said Moir. “They really have to be aware what they’re signing before they get into it preconstruction.”

If they want to pursue a complaint, a purchaser can contact the HRCA to file a complaint and give them as much information as possible. Moir said this includes the contract that they signed, and the communications that they received from the developer. “Then we will look at all of that and contact the developer and get information from them.”

“The possible consequences coming out of an investigation can be anything from a warning or discipline letter that goes on their file to having to take education to possibly suspending or cancelling the developer’s license,” explained Moir. “We can also refer the matter to a discipline committee. It’s independent from the HCRA and they also have the power to fine a developer if they’ve been found to be in breach of the code of ethics.”

Babiera said he and his neighbours are talking about possible litigation. “We just want to know the bottom line. Why is it that Haven Developments utilities connection costs like four times the maximum that other developments basically cost?”

Haven Developments told CityNews last week, regarding the Clarkson development, that there was “nothing exceptional about the current process despite the reaction of a handful of purchasers.”