[dpylyp]

An investor with a number of units under contract for construction in Toronto has received correspondence that the building may not complete construction based on economic unviability.

Interesting clause to use on the part of the builder to put Buyers on Notice that they may be receiving releases (?) on their contracts.

 

[Observer Walt]

David, very interesting. Would you be prepared to disclose which project this is?

 

[ducati0000]

the only ones I see are the ones that has less than %40 sold and been on the market for over a year that may have hard time securing loans from banks.Which projects are we talking about here?

 

[condoboy]

An investor with a number of units under contract for construction in Toronto has received correspondence that the building may not complete construction based on economic unviability.

Interesting clause to use on the part of the builder to put Buyers on Notice that they may be receiving releases (?) on their contracts.

Wouldn't some investors/buyers be relieved that they are not going to go ahead with the project based on today's economy??? Other than having their capital tied up for a bit, this investor will get back all of his money and wait for his/her next opportunity...not such a bad propostion in my opinion. Also, projects get cancelled all the time...some just aren't that good or have poor marketing, sales pitches, locations, price points....it's happened many times in the recent past, well before the downturn...nothing new!

 

[ducati0000]

Wouldn't some investors/buyers be relieved that they are not going to go ahead with the project based on today's economy??? Other than having their capital tied up for a bit, this investor will get back all of his money and wait for his/her next opportunity...not such a bad propostion in my opinion. Also, projects get cancelled all the time...some just aren't that good or have poor marketing, sales pitches, locations, price points....it's happened many times in the recent past, well before the downturn...nothing new!

not if you already sold your previous property or the value of the units are up.

 

[condoboy]

not if you already sold your previous property or the value of the units are up.

With all due respect...I think the types of buyers you are speaking of would have sold their previous properties a lot closer to their closing/move-in date. As for values...I believe that new projects close to the downtown core or on the waterfront will hold their values much better than other properties in the GTA periphery...you do have a point there.

 

[ducati0000]

With all due respect...I think the types of buyers you are speaking of would have sold their previous properties a lot closer to their closing/move-in date. As for values...I believe that new projects close to the downtown core or on the waterfront will hold their values much better than other properties in the GTA periphery...you do have a point there.

actually my cousin sold a runned down house at College,Brunswick to move into a condo,he moved into his GF condo until his is completed.He got tired of doing maintenance on the house,fighting with renters,and the huge increase in the property tax.He be at his GF for at least a year,hope that doesnt strain their relationship.

 

[condoboy]

actually my cousin sold a runned down house at College,Brunswick to move into a condo,he moved into his GF condo until his is completed.He got tired of doing maintenance on the house,fighting with renters,and the huge increase in the property tax.He be at his GF for at least a year,hope that doesnt strain their relationship.

Yeah...hopefully he made the right decision. It will actually help him in the long run to find out if the two of them are actually compatible...not a bad move in my opinion. The only question left is "who would have made his life more difficult - the bad renter or the live-in girlfriend"?

 

[ducati0000]

she has her own condo,the renters actually.Neighbors were getting fed up with load music and the occasional late nite parties,the renters that are attracted to his place are usually the 18-25 crowd.He checked all references of the renters but even then he mentioned hes a magnet for bad tenants overall.He tried to get a older more white collar renter but he said it would cost at least $80k to renovate the home to be more "presentable".He sold it about 6 months ago and got abit less than asking but hes happy.His future condo is near Bay and Lakeshore and tentative first closing date is Dec 2009 but no way that is going to happen.

 

[condoboy]

she has her own condo,the renters actually.Neighbors were getting fed up with load music and the occasional late nite parties,the renters that are attracted to his place are usually the 18-25 crowd.He checked all references of the renters but even then he mentioned hes a magnet for bad tenants overall.He tried to get a older more white collar renter but he said it would cost at least $80k to renovate the home to be more "presentable".He sold it about 6 months ago and got abit less than asking but hes happy.His future condo is near Bay and Lakeshore and tentative first closing date is Dec 2009 but no way that is going to happen.

Yeah, I can relate. I was dating a girl in that area (College and Spadina) a few years back and it was quite an experience. Loud parties, drinking, drugs, sex....it seems that the tenants in those older houses from what I saw weren't too interested in the look and appearance of their dwellings. Mostly young struggling students who were on the edge of dismissal from their respective universities...haha. Even though it was a lot of fun, everyone has to grow up sometime!

 

[cmystikal]

Interesting clause to use on the part of the builder to put Buyers on Notice that they may be receiving releases (?) on their contracts.

That is a pretty standard clause in pre-con Condo contracts, has been for a while.

 

[cdr108]

An investor with a number of units under contract for construction in Toronto has received correspondence that the building may not complete construction based on economic unviability.

Interesting clause to use on the part of the builder to put Buyers on Notice that they may be receiving releases (?) on their contracts.

Was there any firm date for 'release' on their contract?
Has construction started? I assume not, but you never know.

 

[condoboy]

Was there any firm date for 'release' on their contract?
Has construction started? I assume not, but you never know.

I doubt that any rightminded builder would start construction and then release the purchasers from their contracts...that just doesn't make any sense at all. If a builder has reasonable justification that their project won't be economically viable, then yes they may release purchasers from their contracts and give back all deposits with interest...way before any shovel hits the dirt! It's in the purchase agreement...

 

[daveto]

I doubt that any rightminded builder would start construction and then release the purchasers from their contracts...that just doesn't make any sense at all.

Sometimes, things change on them. Consider the case of the Gateway Midtown, which halted construction leaving a big hole in the ground in downtown Calgary.

 

[condoboy]

Sometimes, things change on them. Consider the case of the Gateway Midtown, which halted construction leaving a big hole in the ground in downtown Calgary.

Yeah...you're right. The huge demand for housing in the west (Calgary and Edmonton) created the conditions that Gateway Midtown was faced with when a huge softening of the market appeared. They were overstaffed and construction prices were over-inflated for them to continue with their project even though they had already started digging. This, out of the thousands of projects throughout Canada (that I know of) has been the only one cancelled after construction had already begun. Projects in Toronto and surrounding area will get put on hold and some may even be cancelled. Let's just hope builders don't leave it too long and realize that when their projects aren't going to get off the ground, that they give buyers back their deposits in a timely manner. We'll just have to wait and see what happens in the coming year!