More homebuyer protections needed, says Ontario government

Thestar.com
Kristin Rushowy
Sept. 20, 2018

The Ontario government says it is looking for ways to better protect homebuyers left in the lurch following the latest cancellation of a giant condo project in Vaughan.

“We know that the deposits that those homeowners have made are being held in a trust, as required by Tarion, and they will be getting their deposits back — (but) that doesn’t solve the problem of a new home that they were hoping to get,” said Minister of Government and Consumer Services Todd Smith.

The Icona condos at the Vaughan Metropolitan Centre were cancelled this week by the Gupta Group. The development, approved by Vaughan council on June 19, included two 55-storey residential towers with 1,264 condos and a third building that was to house a 17-storey hotel and another 29 floors with 385 additional residential units and a convention centre.
The Icona condos at the Vaughan Metropolitan Centre were cancelled this week by the Gupta Group. The development, approved by Vaughan council on June 19, included two 55-storey residential towers with 1,264 condos and a third building that was to house a 17-storey hotel and another 29 floors with 385 additional residential units and a convention centre.

He made the comments after buyers in the Icona condos at the Vaughan Metropolitan Centre were left reeling this week after receiving cancellation letters and refunds on condos they purchased from the Gupta Group last year. The development, approved by Vaughan council on June 19, included two 55-storey residential towers with 1,264 condos, and a third building that was to house a 17-storey hotel and another 29 floors with 385 additional residential units and a convention centre.

It was the second major condo project to be killed on that stretch of Highway 7 within six months. Liberty Development’s Cosmos condos was cancelled in April, two years after it began accepting buyers’ deposits. About 450 Cosmos buyers of the 1,100 unit development have filed a court application asking for their purchase agreements to be voided, so they can sue the developer for damages.

Some Icona purchasers say they are watching the case closely.

The developers of both projects cited unspecified financial reasons for cancelling the buildings. Many of the buyers say that the refunded deposits won’t buy them homes in a real estate market that has continued to appreciate since they signed purchase agreements.

“We’re concerned about this — this is a recent development where a couple of these condo companies have gone this route, which is of course very disappointing for the people that were expecting to move into a brand new condo...,” said Smith. “It’s a serious issue that my ministry is looking into right now.”

He noted the Progressive Conservatives have only been in government a short time, but “our government and my ministry is committed to ensuring that there are consumer services in place. It’s a policy that is currently under way for development and we are looking into all the options that are available.”

But he also told reporters at Queen’s Park that the government will be focusing on developers’ complaints about regulations and restrictions in the housing industry that the building industry says have stunted the supply of housing in the province.

“We’re looking at building more housing and making sure, first of all, that those who are affected in these recent developments — particularly in the Vaughan area, and I understand there may be others — get the money back that they’ve invested in purchasing these condos. It’s a policy that’s certainly underway.”

NDP housing critic Suze Morrison, MPP for Toronto Centre, said more protections are needed for consumers, especially first-time home buyers, who feel squeezed out of the housing market.

She said her party is committed to reforming the Tarion builder warranty program to include measures to protect buyers from shoddy construction or unfair financial practices.