It was bad news for the buyers of UrbanCorp’s Kingsclub condos as the developer turn about on their building plans. North York condo rentals will replace these condos for sale in North York in King West. It was a move that staggered 181 buyers. Long back in 2011, many bought these pre-construction condos of King West and have been waiting eagerly that the project stalled out. The plot was just entering the early stages of foundation work. Purchasers were expecting an update from the builder about delays but found the project been cancelled.
What may be the reason for cancellation? Seemingly, the builder did not get funds for the original project but there is no formal declaration on UrbanCorp’s website. Just like the silent cancelling of The Selby at Bloor and Sherbourne a few days before Christmas, builders of condos for sale in North York are trying to step down from projects quietly with fewer media and legal fuss. But the Selby was running in its first month of sales and there could not be many units sold out. So the effect of that declaration was less on consumers. The UrbanCorp case is much different because they were almost sitting on purchaser’s down-payments for a long time and tying their hands from buying anything else. It was not done on purpose of course but the damage to the purchasers is real.
Repaying won’t be enough to conciliate most buyers
Buyers will get their funds back with interest but that interest would be almost minimal. The contracts of the developers refer to the Bank of Canada’s overnight rate as their highest need. Thanks to the latest announcement of BOC for breaking down the rate to 0.75 percent. Hence, the translation of a 20000 dollars investment for three years back is just 20,453 dollars. No one knows about the higher interest rate given in UrbanCorp’s contracts. But in terms of potential earnings, chances are that the interest does not come close to the real losses of buyers.
Think on how much these investments had grown if the buyers would have purchased condos for sale in North York back in 2011. And besides the lost value acknowledgement, purchasers are now experiencing a much more uncooperative North York condo market than they were 3 years back. Hence, the purchasers have to pay more now to buy a similar unit in the other building then had the project not been taken back or had they moved to buy re-sale instead at the time.
Your legal ground is trembling at best
This unfortunate event underlines the problem involved in purchasing on spec and why pre-construction is not a good investment always. If you are an unlucky purchaser of the Kingsclub condos or have bought a different pre-construction North York condo for sale and are worried that this can happen to you as well. What are the legal consequences? The lawyer Mark Youngman says about the matter that the builder is under no commitment to repay buyers beyond the amount mentioned in the purchase agreement that surely includes a section about potential project cancellation if sales are less, offering it adheres to Ontario condominium law. Even though the interest rate given on the contracts is less than that stated in Ontario condo law, then the purchasers need to fight for that additional amount.