Under refinancing, the developers now have no choice but to resell the project for a higher cost, the Toronto Star
“I don’t even know if I can drive by it to see it completed,” according to DaSilva, who noted that the grave disappointment came after a nightmarish series of move-outs due to the numerous delays in construction.
Windmill Development Group partner Alex Speigel stated that he and his firm do not hold such sentiments against the hopeful buyers. In its letter to clients, the company outlined a passage in the purchase and sale agreements (which the buyers signed) that essentially frees Windmill from the contract as it did not meet the agreed-upon “current outside occupancy date.”
“We’ve done our best to try and mitigate the losses for everybody, but clearly people are very disappointed and I certainly understand that,” Speigel said.
Myriad postponements plagued Union Lofts to the point that construction was months behind schedule as of fall 2013. Subsequently, the general contractor hired for the project vanished with delinquent subtrades, which eventually led to the project being slapped with liens and frozen funding.
“It took us a huge amount of time and effort to get the liens cleared,” according to Speigel, adding that Windmill will be losing a significant (although unspecified) amount on the project.
Such incidents are rare, with online real estate portal BuzzBuzzHome noting that only around 1.5 per cent of Toronto pre-builds get cancelled. However, it is a possibility that every would-be home owner should prepare for.
“It’s a cautionary tale to read the contract and make sure you know what you’re getting into,” real estate lawyer Bob Aaron said. “It’s all a question of what’s in the purchase agreement.”
“There’s some escape clauses in the agreement, which are there to protect both the builder and the purchasers against certain situations that can happen,” lawyer Ted Charney agreed. “But, in other circumstances, if the clause is in the agreement and it was properly negotiated and it was relied on in circumstances where it legitimately should be, one of the risks of buying these condos is, years down the road, you could just end up with your money back.”
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Toronto marketing manager Tracey DaSilva was looking forward to a new home in the Junction Triangle when she bought into the Windmill Development Group’s Union Lofts around 4 years ago, but recent events have made it a distant possibility.