Vaughan Condo Development Scraped, Buyers Remain Furious
Would Be Buyers Now Priced Out Of The Market
Almost a week after being advised the condominium project they invested in would not be built, hundreds of GTA home buyers are starting to receive their deposits back.
The money is being returned without interest after the Cosmos Condominium project in Vaughan was scrapped, at least temporarily, by Liberty Development Corporation.
The project was registered by 1945086 Ontario Inc. and promoted for sale by Liberty Development in 2016. All three phases of the project were sold out. But on Thursday, all 1,100 buyers in the Cosmos project were informed it would not go ahead.
“The cancellation of all purchaser agreements was made solely due to the inability to secure satisfactory construction financing,” Liberty spokesperson Danny Roth explained.
No one from Liberty Development would do interviews with Global News.
“I’m shocked, really devastated,” said Euain Browne, a first-time buyer who purchased a one bedroom with den unit in the Cosmos development, located a short walk from the TTC’s new Vaughan Metropolitan Centre subway station.
Browne said he believed Liberty Development was a reputable company, something he said he now questions.
“The mayor of Vaughan was putting out press releases stating this is a great corporation to work with,” he said.
On Wednesday, Vaughan Mayor Maurizio Bevilacqua spoke at a Vaughan municipal council meeting to defend the city’s position.
“It wasn’t our decision. I’m not going to appropriate a problem that I didn’t create. The City has done everything perfectly well,” Bevilacqua said.
“People make decisions, they’ve got to take responsibility and they’ve got to face the music, and I hope they do.”
Vaughan council passed a resolution directed city staff to ask the Ontario Ministry of Government and Consumer Services to review the process by which pre-construction condominium projects are marketed and sold. The city is also going to ask Tarion, the new home warranty program, to explain its role in the cancellation of the project.
Toronto lawyer Bob Aaron said the Government of Ontario bears some responsibility for weak laws that permit developers to bail out of projects like this one. Nothing prevents the same developer from starting another project and charging substantially higher amounts.
“There is a big temptation for builders to back out of the deal and resell the project at a higher price,” Aaron said.
Claude Boiron, a Toronto real estate broker, said buyers entered into the Vaughan project in good faith.
“Most developers are cognizant of their public image,” and reluctant to cancel projects like the Cosmos Condominiums because they may be judged negatively in future releases, said Boiron.
Boiron said he’s been in touch with many of the affected buyers affected by the Liberty Development decision. He said he is offering to reduce his brokerage commission by half to help buyers find other properties. Boiron encouraged other real estate agents and service providers, like lawyers, to do likewise.
Browne, for one, said he is now priced out of the market because of how much real estate values have increased since 2016, when he agreed to buy into the Vaughan project.
Meanwhile, when asked if Liberty Development would elaborate on its reasons on the cancellation, or agree to make executives available, Roth said the company had other priorities.
“We have no plans to issue further media statements at this time. We believe that our efforts are now better spent on the process of returning deposits … rather than on media communications,” he wrote.
Source: Sean O'Shea With Global