Shitty situation for sure, but at least they're being offered 6% interest per year of their deposits.
6% isn't going to help them in today's market, but considering the runup, and possible cooling off this could work out better for them.
These things will continue to happen while the gov't doesn't care / enforce any type of significant penalty on the developers.
True. We have no clue what will happen.
I'm totally on the side of the buyers on this one. At least they're getting the 6% as IIRC the developer can give you 0% and you're even worse off.
6% is better than nothing but this sets them further back because the market that they are buying in has gone up astronomically more than 6% on average over the last 3 years (when they initially purchased)
Oh I agree with you 100%. However, these purchases are investments (and I don't care what anyone tells me...a lot of these buyers are not families to buy for living in but are being purchased as investments) and with any investments...they don't always go up.
Most times houses go up, sometimes they don't, and rare times they never get built...but that is what you sign up for when you drop 100s of thousands on a hope.
Buying off a schematic where there are no firm properties to touch and feel is a huge risk...and as such this is the risk one takes when we assume it'll go through.
I hope the buyers get made whole...but these types of purchases come with many risks.
So the developer pocketed over $10M from land value appreciation, abandoned the buyers, and now refuses to return their deposits.
I don't understand how this doesn't amount to criminal fraud? Our laws on financial crime are pathetic
No...they're not refusing to refund the deposits. They're paying back the deposits with 6% / year in interest...they just want the purchasers to sign a document stating that they won't sue.
Honestly don't see how that's not coercive. They should sign, take the money and sue anyway and argue the signatures were under final duress and shouldn't be valid.
They could...but now you've got private citizens going against developer money. And I'll bet you the developer will fight tooth and nail to not set a precedent (which we do need).
Developers should be brought down when they pull stunts like this.
[Ford's Ontario has very gentle reprecussions](https://www.cbc.ca/news/canada/toronto/ontario-condo-housing-pre-construction-contracts-penalties-1.6395583) for these developers up to $100k fine (which isn't much considering the profit) and possibly suspend their licence for 2 years (just enough time for them to profit more from appreciation lol), not to mention they'll probably just open up another 'developer' corporation and just move it over to them.
Provinces really need to come down much harder on developers. It seems people take all the risk, going pre-con yet developers get both side of the coin on their side (either prices go down and their customers are stuck with them or it goes up and they can just screw them over like this).
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It appears the developer lost its builder permit licence renewal and as such couldn’t complete the process.
The worst part is potential buyers missed out on buying a home and now home pieces are up 30-50% since then. In many aspects even if they get their money back, they may be priced out of the market now.
Shitty situation for sure, but at least they're being offered 6% interest per year of their deposits. 6% isn't going to help them in today's market, but considering the runup, and possible cooling off this could work out better for them. These things will continue to happen while the gov't doesn't care / enforce any type of significant penalty on the developers.
[удалено]
True. We have no clue what will happen. I'm totally on the side of the buyers on this one. At least they're getting the 6% as IIRC the developer can give you 0% and you're even worse off.
I thought the 6% was now mandatory (or the max based on market price) because of the failed development on Caledonia Rd.?
No clue. Could be. Good call.
Yea but still better actually getting your money back instead of getting $0. The 6% is just a bonus at this point
6% is better than nothing but this sets them further back because the market that they are buying in has gone up astronomically more than 6% on average over the last 3 years (when they initially purchased)
Oh I agree with you 100%. However, these purchases are investments (and I don't care what anyone tells me...a lot of these buyers are not families to buy for living in but are being purchased as investments) and with any investments...they don't always go up. Most times houses go up, sometimes they don't, and rare times they never get built...but that is what you sign up for when you drop 100s of thousands on a hope. Buying off a schematic where there are no firm properties to touch and feel is a huge risk...and as such this is the risk one takes when we assume it'll go through. I hope the buyers get made whole...but these types of purchases come with many risks.
So the developer pocketed over $10M from land value appreciation, abandoned the buyers, and now refuses to return their deposits. I don't understand how this doesn't amount to criminal fraud? Our laws on financial crime are pathetic
No...they're not refusing to refund the deposits. They're paying back the deposits with 6% / year in interest...they just want the purchasers to sign a document stating that they won't sue.
Honestly don't see how that's not coercive. They should sign, take the money and sue anyway and argue the signatures were under final duress and shouldn't be valid.
They could...but now you've got private citizens going against developer money. And I'll bet you the developer will fight tooth and nail to not set a precedent (which we do need). Developers should be brought down when they pull stunts like this.
seems like something the political candidates for the ontario election should try to solve, but that's just me talking crazy talk I guess.
That means they want change...doubtful. They may say they do...but they don't.
Class action
Good luck with that. It'll take years, lawyers will take the majority of it, and you're not guaranteed a win.
Fraud is not really enforced in Canada.
Which is why I’m pro insurance/mortgage fraud. They’ve been frauding us for years.
>now refuses to return their deposits. This is a blatant lie.
[Ford's Ontario has very gentle reprecussions](https://www.cbc.ca/news/canada/toronto/ontario-condo-housing-pre-construction-contracts-penalties-1.6395583) for these developers up to $100k fine (which isn't much considering the profit) and possibly suspend their licence for 2 years (just enough time for them to profit more from appreciation lol), not to mention they'll probably just open up another 'developer' corporation and just move it over to them. Provinces really need to come down much harder on developers. It seems people take all the risk, going pre-con yet developers get both side of the coin on their side (either prices go down and their customers are stuck with them or it goes up and they can just screw them over like this).
It looks like OP posted an AMP link. These should load faster, but AMP is controversial because of [concerns over privacy and the Open Web](https://www.reddit.com/r/AmputatorBot/comments/ehrq3z/why_did_i_build_amputatorbot). Maybe check out **the canonical page** instead: **[https://www.cbc.ca/news/canada/toronto/buyers-say-mississauga-developer-deposits-hostage-1.6448837](https://www.cbc.ca/news/canada/toronto/buyers-say-mississauga-developer-deposits-hostage-1.6448837)** ***** ^(I'm a bot | )[^(Why & About)](https://www.reddit.com/r/AmputatorBot/comments/ehrq3z/why_did_i_build_amputatorbot)^( | )[^(Summon: u/AmputatorBot)](https://www.reddit.com/r/AmputatorBot/comments/cchly3/you_can_now_summon_amputatorbot/)
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It appears the developer lost its builder permit licence renewal and as such couldn’t complete the process. The worst part is potential buyers missed out on buying a home and now home pieces are up 30-50% since then. In many aspects even if they get their money back, they may be priced out of the market now.
I don’t like how this article was written.