Condo buyers considering legal options in Vaughan cancellation

Toronto.citynews.ca
April 10, 2018
Adrian Ghobrial

Upset would-be condo owners in Vaughan are considering their legal options after their future homes were cancelled.

“In real estate, time is your friend. We’ve lost two years and you can’t get that back,” says buyer Steve Fox. “Two years of investment time is gone.”

On Friday, CityNews told you about the Cosmos Condo Developments, a residential project near the Vaughan TTC station, sold in 2016, and recently cancelled.

Owners have begun getting their deposits back, with zero interest, and no further answers about what is going on.

“It was part of my retirement,” says Fox, who says he bought a two-bedroom Cosmos condo for $450,000.

Fox says the fact that deposits are being returned without any interest isn’t the big issue — it’s that he’s losing out on how much his investment condo has increased in value over the last two years. He estimates the loss to be around $200,000 dollars.

Since the condos were originally sold, property values in Vaughan, near Highway 7 and Jane Street have gone up substantially, says real estate broker Claude Boiron.

“Depending on the specific project, you can see property values having gone up anywhere from 20% to 40% in the area,” he says.

“Buyers, maybe they’re not looking for fantastic returns, but at the very least they’re upset that the dollar that they paid two years ago, the contract amount that they agreed to, very often they can no longer afford the same square footage or the same purchase price now in today’s prices,” he adds.

City News has learned that some buyers are considering bringing a class action suit against the builders. Many are upset with what they believe are unacceptable reasons for cancelling the project.

Last week, owners received a letter from Liberty Development stating the project was canceled. Liberty said the project was cancelled “due to the inability to secure satisfactory construction financing,” and the decision to scrap it was made by vendors, not Liberty Development.

The vendor is a numbered company. A CityNews investigation has confirmed that Fred Darvish, the president of Liberty Development, is also associated with the vendor. A PR representative for Liberty told CityNews today that in the company’s view, the developer and the project vendor are “separate entities.”

“I am not thrilled about one blaming the other when it’s really the same thing. That shouldn’t happen and the law shouldn’t allow this to happen,” says real estate lawyer Bob Aaron.

Tarion tells CityNews they have requested information from Liberty Development to review the circumstances surrounding the cancellation. Though the warranty agency says any purchasers should reach out to a lawyer if they feel that the cancelation was not made in good faith.

Liberty declined CityNews’s request for a full interview, stating they declined our request saying that they’re focusing their efforts on speaking with impacted buyers. Though those we’ve spoken to say they have yet to hear from Liberty.

Fox points out that buyers don’t have the option of backing out of their side of the deal.

“What if the tables were the other way around?” he says. “What if prices dropped 40 percent am I able to back out? No way!”