Claudia Uribe decided to drive by the construction site at 2359 Danforth Ave on a Monday last month. The 39-year-old teacher at Coppard Glen Public School in Markham had signed a pre-sale contract in July 2016 for a studio apartment inside the 10-storey, 119-unit building that was slated to be built on the site, and she wanted to see if any progress had been made on the development. When she drove by, there was no construction happening.
That night, she received a notice of cancellation from the developer, Diam Developments Inc.
“I burst into tears,” Uribe told the Globe and Mail the next day. “I just happened to drive by the site yesterday... I had stopped doing that because it was so disappointing – and I actually did get a bad feeling, because there was no machinery any more.”
Buying a pre-construction condo is a big risk, as condo cancellations in the GTA have — to much concern and disappointment — become a fairly typical occurrence. They happen when a development is slated to be ready for a certain date, would-be buyers sign presale contracts (often selling out the units) and provide a deposit to secure it, and then the developer pulls the plug, sometimes leaving the holders of those presale contracts without their deposit. Cancellations happen for a number of reasons, ranging from unforeseen financial difficulties to rising construction costs.
Urbanation estimates that from January 1 to mid-December 2018, the GTA saw nine developments — or 4,202 units — cancelled.
We’ve already we’ve seen at least two developments cancelled so far this year — within a month of each other, to boot. This list is a tabulation, and we’ll keep adding to it should any new cancellations crop up. Here are the GTA condo projects that have been cancelled so far this year:
Development: On the Danforth
Developer: DIAM Developments Inc.
Cancellation date: March 2019
Location: Toronto, Ont. (2359 Danforth Ave.)
Unit price: Uribe agreed to pay just under $300,000 for a studio apartment in this 119-unit development.
Reason for cancellation: The Globe and Mail reported that in its cancellation letter, Diam cited “significant unanticipated construction cost increases; construction delays; the refusal of DIAM’s lender to make the requisite construction financing advances under the construction loan; and the lender’s demand for repayment in full of the amounts owing under the construction loan.”
Did buyers get their deposits back? Yes, but not the interest that was earned.
Development: The Step
Developer: Bondfield Construction Company and Terranata Developments
Cancellation date: April 2019*
Location: Toronto, Ont. (near Islington and Finch)
Unit price: $192,990, according to BlogTO, which reported that the development had already sold all of its 111 units prior to cancellation.
Reason for cancellation: Reasons are unclear at this time.
Did buyers get their deposits back? Some have, but not all, according to BlogTO, which says it’s unlikely the buyers will get any interest returned to them.
*New home regulator Tarion says it was notified of the cancellation in February, but market researching firm Urbanation says this project was actually cancelled in 2018 but only started to make headlines this year. We didn’t include it in last year’s roundup, so we’ve included it here.
Development: The Bean
Developer: Royalpark Homes
Cancellation date: Between March and April 2019
Location: Toronto, Ont. (Dufferin Street, just north of Eglinton Ave. W)
Unit price: Unknown, but initially there were 50 units, and the builder later applied for 113 units.
Reason for cancellation: Unknown. Urbanation tried to contact Royalpark Homes several times to no avail, which one Urbanation employee described as a “telltale sign” that a project has been cancelled, according to Livabl.com. Livabl.com also tried contacting Royalpark Homes and had no luck and says the project was removed from the Royalpark Homes website.
Did buyers get their deposits back? Seemingly, yes. On popular real estate forum urbantoronto.ca, there was mention of the project being cancelled and deposits being returned to buyers in March but there’s still much unknown about this cancellation.
Photo credits: Urbantoronto.ca and Step Condos.