maestro said:
Buyers seem to be completely ignorant to the associated risks of buying presale and, when things don't work out as planned, it's suddenly time to change the condo laws. Due your own due diligence. Then again, the whole idea of putting down a deposit "in good faith" on a unit you wish to purchase in 4 or 5 years time doesn't make any sense to me. At some point in time, you're going be stuck with a unit that has a market value a fraction of what you paid.
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It reminds me of cell-phone contracts and how despite 15 years and a thousands identical stories you still here laughable tales of the nature: "family stunned by shocking roaming charges: "When I signed up for my $10/month plan with no data component, I assumed that mean unlimited data all across the planet and I could download 500Gb while on my trip to Krygyzstan for free! Now I find out I have to pay for it, but only after I use it? Why didn't they tell me before I booked the trip I never mentioned I was taking? How could I have ever known? It MUST be someones fault other than mine! Why isn't the government making laws so stupid people like me never have to think!"
 
maestro said:
Huh? Buyer gets their deposit. Builder is out millions in marketing and other expenses.

Changes in finishes or layout is something totally and not applicable in this case. You are buying into a project that is not guaranteed to be built.
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You put the onus on the buyer for not doing their due diligence....fine. But you'd also hope the builder would act in good faith and that doesn't always happen. I'm speaking in general, not necessarily about this situation.
 
Jonny5 said:
It reminds me of cell-phone contracts and how despite 15 years and a thousands identical stories you still here laughable tales of the nature: "family stunned by shocking roaming charges: "When I signed up for my $10/month plan with no data component, I assumed that mean unlimited data all across the planet and I could download 500Gb while on my trip to Krygyzstan for free! Now I find out I have to pay for it, but only after I use it? Why didn't they tell me before I booked the trip I never mentioned I was taking? How could I have ever known? It MUST be someones fault other than mine! Why isn't the government making laws so stupid people like me never have to think!"
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I don't see it that way at all. Talk about extremes.
 
TheKingEast said:
You put the onus on the buyer for not doing their due diligence....fine. But you'd also hope the builder would act in good faith and that doesn't always happen. I'm speaking in general, not necessarily about this situation.
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Well, I'm being specific to this situation. The buyer should know there are no guarantees with prebuilt that the project is going ahead. You also have buyers signing contracts for developments that staff has refused zoning and then complaining to have their deposits returned. Developers can be conniving SOBs because buyers let them. Further legislation to restrict how presales are conducted is just a bandaid solution. Just look at Fortress Capital and other syndicated mortgage schemes. How do they manage to mortgage finance dozens of projects in Canada given what happened in 2008? Someone is buying these bonds they issue.
 
I understand there is no guarantee. But for people who needs/wants to buy a place to live, are they restricted to houses and resale condos? Being told you can no longer have possession of your unit after waiting 3-4 years, is that right? They would need to start the seach again, and probably spooked and have to settle for resale condos.
 
will it happen to the other pre-construction condos? disgusting...shame on Urbancorp
 
It is very unfortunate what happened to purchasers in Kingsclub condos, but as many have said, there is a risk that individuals inherently accept when buying pre-construction.

Frankly, no builder would ever intend/plan to "scam" purchasers (as some have suggested here) with the intention to fold/cancel a project as it would not be in the company's best interest to waste hundred and thousands of dollars on design/marketing with no return ... and definitely builders do not make a living from the interest generated from the "free loan" that purchasers give as deposits ... projects are only shut down due to poor sales and financing issues
 
Solaris said:
It is very unfortunate what happened to purchasers in Kingsclub condos, but as many have said, there is a risk that individuals inherently accept when buying pre-construction.

Frankly, no builder would ever intend/plan to "scam" purchasers (as some have suggested here) with the intention to fold/cancel a project as it would not be in the company's best interest to waste hundred and thousands of dollars on design/marketing with no return ... and definitely builders do not make a living from the interest generated from the "free loan" that purchasers give as deposits ... projects are only shut down due to poor sales and financing issues
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I am a bit confused with this "free loan" idea......deposits are held in trust and can't actually be accessed by the developer for any purpose that they might need a "free loan" for. In very limited circumstances they can be insured and then used to construct the building that they relate to (ie. form part of the builder's cash into the project) but even that is not a "free loan" as there is a cost to it....and since we are talking about buildings getting cancelled before construction it does not even apply here.
 
I'm only using term "free loan" (in quote) as some previous post references it that way w.r.t. to Big Bad Evil Builders ... I agree with you TOareaFan and don't see it that way either
 
My thoughts - while sales may have been slow recently, UrbanCorp did have sufficient sales and financing in place to get construction well underway, given the fact that the rental market in downtown Toronto has been quite strong for a while now, I suspect UrbanCorp received a offer / proposal for a bulk sale of units to a rental operator, and as the potential transaction evolved it morphed into being a purchase of (at least) the entire residential portion of the development, with the consequent cancellation of the already signed individual purchaser agreements.

Given that UrbanCorp already had a reputation as not being the best developer in town, the fact that they would, and indeed did this to longstanding Kingsclub purchasers should have a justified impact on any future condominium projects they wish to bring to the market. If anyone is so foolish as to buy from them in the future - then let them truly be governed by the phrase: BUYER BEWARE
 
AHK said:
My thoughts - while sales may have been slow recently, UrbanCorp did have sufficient sales and financing in place to get construction well underway, given the fact that the rental market in downtown Toronto has been quite strong for a while now, I suspect UrbanCorp received a offer / proposal for a bulk sale of units to a rental operator, and as the potential transaction evolved it morphed into being a purchase of (at least) the entire residential portion of the development, with the consequent cancellation of the already signed individual purchaser agreements.

Given that UrbanCorp already had a reputation as not being the best developer in town, the fact that they would, and indeed did this to longstanding Kingsclub purchasers should have a justified impact on any future condominium projects they wish to bring to the market. If anyone is so foolish as to buy from them in the future - then let them truly be governed by the phrase: BUYER BEWARE
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The reports I read were that there were 181 sales in a 639 unit project......that is 28%.......not enough to meet any lender I know's presale requirement.
 
Solaris said:
I'm only using term "free loan" (in quote) as some previous post references it that way w.r.t. to Big Bad Evil Builders ... I agree with you TOareaFan and don't see it that way either
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understand.....I, lazily, just picked up your post as it was the last use of the term.
 
As a buyer i would be furious that my down payment sat idle on a perspective unit i was expecting while the prices of other and subsequent developments shot up and my purchasing power in another development, precon or not, ultimately decreased. However, echoing what has already been said, its all a risk i was aware of (or atleast should have been aware of)and so i cant really blame anyone.
 
according to RealNet the last sale was in December 2012 (three 2-bedrooms), and 185 of 293 (63%) of total units were sold
 
This situation is like saying buy and eat food at your own risk. You can't sue anyone if something happens to you. But in reality that isn't the case. You are entitled to sue and there is a regulatory body that overseas the safety and quality of the food. I don't see how that can't be and shouldn't be implemented in the real estate industry. There's really no excuse.
 
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