$12.2 million missing from advance condo sales
Receiver for project and B.C.’s top court trying to track down missing $12 million
Individual pre-sale condo units in a Metro Vancouver development were sold to as many as three or four buyers, B.C. Supreme Court heard Monday, in a case where several parties are hoping to find out what happened to more than $12 million paid by prospective homebuyers.
Mark John Chandler, a Vancouver condo developer with a history of legal issues, was ordered Monday to provide financial records and other documents to the Bowra Group, the receiver appointed last month by the court to take control of a Langley Township condo development called Murrayville House, in an attempt to repay millions in debt that Chandler’s creditors allege he owes.
In the first month since the Bowra Group took over the Murrayville project, the receiver has reviewed copies of 149 pre-sale purchase and sale agreements for 91 of the strata units in the 92unit building, and is “concerned” there may still be others they have not yet seen, according to the receiver’s first report filed in court last week.
The report says 31 units have been sold twice, 12 have been sold three times, and one unit was sold four times.
Mario Mainella, Bowra Group’s senior vice-president overseeing the Murrayville file, said Monday outside court: “The whole situation is complicated and we’re trying to make the best of a bad situation. It’s inevitable that somebody is going to get hurt in this. There’s no way you can have 149 pre-sale purchasers and 91 units and have it work out for everyone.”
B.C. Supreme Court Judge Shelley Fitzpatrick dismissed an application for adjournment made by Chandler’s lawyer, Tim LoumanGardiner.
She said she “completely” disagreed with Louman-Gardiner’s position that the bank records were not necessary for the receiver’s work on the Murrayville project, and she ordered Chandler’s company to provide the records within seven days.
Fitzpatrick asked him: “If something untoward has happened with this money, wouldn’t the general body of creditors be quite interested in that? I mean, that might cause the receiver to say it’s appropriate to put this company into bankruptcy.”
Chandler’s lawyer LoumanGardiner responded: “But what relevance could that have to those unsecured creditors?”
“It might be highly relevant,” Fitzpatrick replied.
“If it’s landed in Mr. Chandler’s pocket, it might be highly relevant.”
Louman-Gardiner declined to discuss the case when approached by a Postmedia reporter outside court. Chandler was not in court Monday, and a request for comment passed through his lawyer was not returned.
Chandler’s numbered company and its legal counsel provided the receiver with 86 pre-sale contracts and the related deposits totalling $1.4 million, which has been transferred from the company’s lawyer’s trust account to the receiver’s legal counsel’s trust account.
But the receiver also uncovered a further group of 63 homebuyers as well as a total of $12.2 million that was paid to Chandler’s numbered company for the purchase of units, according to the report.
The questions of where that $12.2 million ended up was the subject of much discussion in court on Monday.
The receiver has asked the company to provide a summary of the funds advanced to the company for purchase of units, the report says, but “the company has not provided an accounting of these funds, confirmation as to whether they are being held in a bank account or if the funds still exist.”
Lawyers representing creditors as well as dozens of prospective homeowners argued Monday in support of the receiver’s attempt to get more information.
“We should know how those funds were used,” said Kibben Jackson, a lawyer representing one of the creditors. “But without being able to do that investigation, we are all completely at a loss as to what happened with the money.”
Mainella’s report estimates, as of last month, the various creditors including homebuyers were owed about $62 million, more than twice the property’s value of $29 million.
Murrayville is not Chandler’s first project to face allegations of double-selling units.
In 2006, Chandler was working on several Vancouver condo developments when he was the subject of a cease-marketing order from B.C.’s then-superintendent of real estate, W. Alan Clark, who wrote there was a likelihood Chandler “sold one or more development units in the developers’ developments to more than one purchaser.”
There’s no way you can have 149 pre-sale purchasers and 91 units and have it work out for everyone.