Buyers of GTA development uncertain as it enters receivership

Buyers who have been waiting years to move into homes at a pre-construc‐ tion development north of Toronto are facing more uncertainty and delays, af‐ ter the project was placed into receivership earlier this year.

Operating as Mapleview Developments, Richmond Hill-based Pace Developmen‐ ts was building more than 1,000 condos and town‐ homes in six phases on 20 hectares of land across from the Barrie South GO station, near the intersection of Yonge Street and Mapleview Drive E., about 100 kilome‐ tres north of Toronto.

But the future of the par‐ tially-completed Urban North Townhomes project, which first went up for sale in 2018, is now up in the air.

"I feel betrayed," said Me‐ lenie Chan, who paid a $25,000 deposit after signing a sales agreement for a twobedroom unit in September 2018.

"It's just sickening that they can take my money ... I feel like I can't do anything."

The project is the latest Ontario residential develop‐ ment to enter receivership - a court-led process secured lenders can use to recover costs from assets, usually through a sale - as some de‐ velopers struggle to com‐ plete projects amid elevated interest rates, high construc‐ tion costs and a slower real estate market.

10s of millions of out‐ standing loans

A judge from the Ontario Superior Court of Justice ap‐ pointed KSV Advisory in March to take control of the project, following an applica‐ tion by one of its lenders, KingSett Mortgage Corpora‐ tion, claiming the developers have missed payments and it's owed more than $47 mil‐ lion plus interest.

Dino Sciavilla and Yvonne Sciavilla, both directors of Mapleview Developments and Pace Developments, are listed as guarantors of the loan, according to court records and the Home Con‐ struction Regulatory Author‐ ity (HCRA), which regulates home builders in Ontario.

"The applicant has lost all confidence in the debtors' management ... specifically due to their significant debt load and dire liquidity is‐ sues," lawyers for Kingsett ar‐ gued in their application.

In addition to at least three other lenders, who are also owed millions of dollars, 10 construction liens have been registered against the property, with the largest held by Condrain Group for more than $4 million.

Kingsett argued the ap‐ pointment of a receiver would "provide the most ef‐ fective and appropriate method of effecting an order‐ ly, efficient, and transparent sale of the property."

Pace Developments didn't respond to requests for com‐ ment CBC Toronto sent via email and phone.

Buyers waiting

Chan said she and her husband bought the home for their son to move into af‐ ter he graduated high school.

Their sales agreement identified the first possible move-in date as July 2021 and the last possible date as October 2023, although Chan says the closing date has been pushed back multiple times, with the latest being July 2024.

"We wanted to give gener‐ ational wealth to our kids," Chan said. "We wanted to be able to secure something for them so in the future they're not struggling like how we did, you know, and it's so up‐ setting because I feel like we can't get there."

Chan said it's now unclear when, or if, she'll get the home, whether her sales agreement will be honoured or if she'll have to pay more to hang on to the unit.

Anna Mutetwa signed a sales agreement for a condo in August 2019, with an esti‐ mated closing date of Octo‐ ber 2022. She said it took all of the savings she had to put down the $25,000 deposit. She planned to move in with her kids, but instead she's still renting.

"I've missed out on the pride of ownership. I've mis‐ sed out on building equity. I've missed out on giving a stable home for my children," Mutetwa said. "I think there should be laws and regula‐ tions that regulates these de‐ velopers, and they should be financially transparent every step of the way."

'No action has been tak‐ en'

In a notice to home buy‐ ers published in April, KSV Advisory said it's currently re‐ viewing the status of the project.

KSV said sales already closed for 264 of 311 units in the first two phases, while the remaining 47 units are partially complete. There are "a number" of pre-sales for phases three and four, the receiver said, although it did‐ n't identify how many. Con‐ struction hasn't begun on the final four phases, KSV said.

"At present, no action has been taken ... with respect to the project completion or any purchase agreements," the notice reads.

"The purchase agreemen‐ ts remain in full force and ef‐ fect, subject to the terms of the receivership order."

Mark Morris, a real estate lawyer with LegalClosing.ca, said there's not much buyers waiting to take possession can do other than wait to see how the receivership process plays out.

The options available to the receiver include can‐ celling existing sales agree‐ ments and then selling the project to a new developer, Morris said.

But because of the amount of money already in‐ vested and tepid demand for new builds, Morris said the receiver might decide that the best way to maximize val‐ ue for the lenders is to hon‐ our the existing sales agree‐ ments and appoint a general contractor to finish the project.

"What I think will happen in this case is that - the sunk costs having already been largely absorbed - these con‐ tracts will be completed re‐ gardless of how and by who," Morris said.

"They'll be completed to the standard of the Ontario Building Code and the pur‐ chasers will be forced into a closing position, though it will be delayed."

KSV Advisory didn't re‐ spond to a request for com‐ ment.

HCRA takes disciplinary action

CBC Toronto previously reported on this develop‐ ment in 2021, when Maple‐ view Developments sent let‐ ters to some 70 Phase 1 buy‐ ers, saying it planned to can‐ cel their sales agreements unless the buyers paid an ad‐ ditional $100,000. The devel‐ oper cited challenges related to the COVID-19 pandemic as its justification.

The ensuing controversy prompted criticism from Pre‐ mier Doug Ford and an inves‐ tigation by the HCRA.

"Nothing burns me up more than that - some devel‐ oper just trying to make extra money off the backs of hardworking people. Unaccept‐ able," Ford said at the time.

"You signed a contract. You better … build that damn house."

In November 2023, the HCRA referred Mapleview De‐ velopments to its disciplinary committee, alleging the com‐ pany "unlawfully terminated dozens of agreements of pur‐ chase and sale ... and misled 33 purchasers to unethically extract over $3 million from them."

HCRA alleged Mapleview altered 20 of 35 sales agree‐ ments it provided to the reg‐ ulator to make it appear as if the cancellations and price increases were lawful and al‐ lowed by the agreements.

A date for the HCRA disci‐ plinary hearing hasn't been set.