Province investigating condo cancellations
Vaughan homebuyers say market has outpaced their returned deposits
The Ontario government says it is looking for ways to better protect homebuyers left in the lurch following the latest cancellation of a giant condo project in Vaughan.
“We know that the deposits that those homeowners have made are being held in a trust, as required by Tarion, and they will be getting their deposits back — (but) that doesn’t solve the problem of a new home that they were hoping to get,” said Minister of Government and Consumer Services Todd Smith.
He made the comments after buyers in the Icona condos at the Vaughan Metropolitan Centre were left reeling this week after receiving cancellation letters and refunds on condos they purchased from the Gupta Group last year. The development, approved by Vaughan council on June 19, included two 55-storey residential towers with 1,264 condos, and a third building that was to house a 17-storey hotel and another 29 floors with 385 additional residential units and a convention centre.
It was the second major condo project to be killed on that stretch of Highway 7 within six months. Liberty Development’s Cosmos condos was cancelled in April, two years after it began accepting buyers’ deposits. About 450 Cosmos buyers of the 1,100 unit development have filed a court application asking for their purchase agreements to be voided, so they can sue the developer for damages.
The developers of both projects cited unspecified financial reasons for cancelling the buildings. Many of the buyers say that the refunded deposits won’t buy them homes in a real estate market that has continued to appreciate since they signed purchase agreements.
“We’re concerned about this — this is a recent development where a couple of these condo companies have gone this route, which is of course very disappointing for the people that were expecting to move into a brand new condo...,” said Smith. “It’s a serious issue that my ministry is looking into right now.”
He told reporters the government will be focusing on developers’ complaints about regulations and restrictions in the housing industry that they say have stunted the supply of housing in the province.
“We’re looking at building more housing and making sure, first of all, those who are affected in these recent developments — particularly in the Vaughan area, and I understand there may be others — get the money back they’ve invested in purchasing these condos. It’s a policy certainly underway.”