Homebuying

Here are the GTA condo and house projects that have been cancelled in the past year

By: Jessica Mach on July 4, 2018

Buying a pre-construction is risky business. But in the Greater Toronto Area, where a growing number of would-be sellers are holding onto their properties longer in the hopes that home prices will swing up again soon, securing a spot in a development that doesn’t even exist yet can feel like one of the safest bets for securing a home in the city at all.

Until you’re actually living in your purchased unit, though, there’s no real guarantee that it’ll come to fruition. In recent years, many buyers discovered this the hard way when the pre-construction units that they’d purchased were abruptly cancelled, and taken away.

How often does this happen? Since the start of 2017, ten GTA condo projects with a combined 3,920 units were cancelled either mid-construction or before construction even began, said Shaun Hildebrand, a spokesperson for Urbanation. The figures are as of early May.

There’s a lack of clarity around how many projects have actually been cancelled, however. Altus Group Ltd., a real estate services firm that is also based in Toronto, reports a count of 17 cancelled developments with a smaller total of units — 3,627.

According to Newmarket-based lawyer Mark Epstein, whom we spoke to in May, there are a number of reasons why builders will abruptly cancel a development. These run the gamut from insufficient financing to not being able to secure the appropriate permits to straight-up fraud — and because the contracts buyers sign with builders are typically drawn up by the builders themselves, there are plenty of perfectly legal ways for a builder to suddenly cancel a development, consequence-free.

So, what are the most frequently-cited reasons for cancellation in the GTA? To find out, we’ve taken a look at the most high-profile cases of pre-construction cancellation since the start of 2017. Below, our list, starting with the most recent — and including two projects that were cancelled, but eventually revived.

Development: Cosmos Condominiums

Developer: Liberty Development Corporation
Cancellation date: April 2018
Location: Vaughan, Ont.
Unit price: Between the mid-$200,000s and just under a million dollars, the Globe and Mail reported
Reason for cancellation: Liberty Development told buyers that it was challenged by “unsatisfactory financing terms”
Did buyers get their deposits back? Yes

Development: Kennedy Gardens

Developer: Time Development Group Inc.
Cancellation date: Jan. 31, 2018
Location: Scarborough, Ont.
Unit price: Prices start at the low $200,000s; at least one person paid $525,000 to secure a unit, according to the Globe and Mail
Reason for cancellation: The developer did not sell enough units and could not secure satisfactory construction financing
Did buyers get their deposits back? Yes

Development: Museum FLTS

Developer: Castlepoint Numa
Cancellation date: November 2017
Location: Junction Triangle, Toronto, Ont.
Unit price: The Toronto Star reported units of $269,900 to $586,900, but BlogTO noted that several buyers purchased their units for “well over $1 million”
Reason for cancellation: Insufficient construction financing, could not secure development approvals or permits from the City of Toronto
Did buyers get their deposits back? Yes

Development: The Anchors at Lakeview

Developer: Dunsire Developments
Cancellation date: Summer 2017
Location: Mississauga, Ont.
Unit price: Between $451,990 and $617,990 for a unit in the eastern part of the development, and $425,990 and $456,990 for a unit in the development’s western portion, according to Markham-based brokerage Landpower
Reason for cancellation: The development’s lenders foreclosed on the property due to “delays in receiving necessary municipal permits, unparalleled spikes in both material costs and labour fees, and a lengthy work stoppage by trade unions last year,” said a statement from Dunsire
Did buyers get their deposits back? Yes, in addition to any interest earned to date

Development: On the Go Mimico

Developer: Stanton Renaissance
Cancellation date: Spring 2017
Location: Etobicoke, Ont.
Unit price: According to the website of Toronto-based broker Maziar Moini, units in the development were selling for between $298,900 and $815,900
Reason for cancellation: The CBC reported that the development was “placed into court-ordered receivership due to massive financial problems” that may have been evident since at least 2012. That year, Metrolinx, the Golden Horseshoe region’s public transportation system, backed away from a previous deal to partner with Stanton. In 2013, construction crews began walking off the job, claiming that they hadn’t been paid by the developer
Did buyers get their deposits back? Yes

Development: Houses in the “Queensway subdivision” of Keswick, Georgina

Developer: Park Avenue Homes
Cancellation date: Spring 2017
Location: Georgina, Ont.
Unit price: Not available
Reason for cancellation: The developer cancelled their contracts with buyers — possibly improperly. At least two buyers told Tarion that the development “refunded their deposit monies in full, only to appear to relist the properties for a higher sale price.”
Did the buyers get their deposits back? Yes

The ones that came back to life...

We found a couple of projects that risked cancellation, but were eventually built.

Development: Central Park Ajax

Developer: LeMine
Cancellation date: January 2018
Location: Ajax, Ont.
Unit price: Not available
Reason for cancellation: The mayor of Ajax, Steve Parish, announced that the city would be terminating their partnership with the development in January. Parish speculated that LeMine did not have “proper financing in place”
Current status: In February, the project announced that it had received the “first tranche of $10 million” from new equity partners. The money will be put towards construction on the development

Development: Harmony Village Sheppard

Developer: City Core Developments in partnership with Fortress Real Developments
Cancellation date: 2017
Location: Scarborough, Ont.
Unit price: Not available
Reason for cancellation: In April, the Globe and Mail reported that the project was in receivership, and that 200 contracts with buyers had been terminated. A blog, LandlordRescue.ca, claimed that the project had gone bankrupt.
Current status: The website for the project says that the status of the building is “completed,” which, according to the website, means that the “building is occupied by residential and/or commercial tenants/residents or is substantially completed.” 

 

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