Money down, but Winnipeg condo buyers waiting for units to be built
CBC News—Manitoba
By Vera-Lynn Kubinec
14 May 2015

Jeffrey Vallis put down $30,000 in 2013 for a unit in D Condo and expected to move in March 1, 2015. He's been told it won't be ready until March 30, 2016. (Jaison Empson/CBC)

Some Winnipeg condo buyers are finding out the hard way that possession dates in new construction are often subject to delays and leave the buyer with little recourse.

CBC News talked to two buyers who paid thousands of dollars in down payments on condo units and are now asking to cancel the contracts and get their money back since the construction projects are behind schedule.

Jeffrey Vallis put down $30,000 in 2013 for a unit in D Condo high rise being built by Sandhu Developments at 390 Assiniboine Ave. 

Vallis expected to move into his condo March 1, 2015 but he said he's now told it won't be ready until March 30, 2016 – more than a year late.

"When I first purchased it I didn't think that this could even happen. I didn't fathom the idea that it could be delayed this much or that they wouldn't start building for over a year from what they said they would," Vallis said.

"I guess I was a bit naive in terms of how quickly things would move," he added.

Delays 'inevitable' lawyer says

Lawyer Robert Giesbrecht, who represents developers including Sandhu, said "delays in a large project like D Condo are inevitable and they're built into the contract. And people who buy off paper need to understand that."

Giesbrecht said it takes time for developers to get permits and financing in place.

"So when I do their contracts I make sure that there's no firm representation as to when the possession date will be." Giesbrecht said, adding delays are common in other types of construction as well.

He said it's often not possible for developers to allow buyers out of their contracts.

"If [developers] start losing buyers they start losing the confidence of their lender and before you know it, the project's in trouble," said Giesbrecht.

"So really the only way to get these projects built is to have people who are prepared to wait it out," he said.

But for Vallis, a delay of more than a year doesn't seem fair.

"I've found out that this isn't uncommon. This kind of thing happens all the time and unfortunately the power seems to be with the developers and not with the buyers," Vallis said.

pure frustration says buyer

At a different condo project called Urban Glo, first-time buyer Randal Boiteau put down $5,000 last year for a unit at 18 Picardy Place being developed by Winn Builders on the eastern edge of Wolseley.

Boiteau expected he'd be moving into his new condo July 30, 2015, but construction hasn't even started and he says he has no idea when it will finish.

"It's pure frustration at the moment," Boiteau said. 

"Basically they have a clause in [the contract] if there's stuff beyond their control, they can delay the build at their discretion. In my case, I don't know what the delays are but it's being delayed, so there's not much I can do," he said.

Both Boiteau's and Vallis's contracts provide that the developers can delay possession dates for a list of factors varying from strikes, lockouts, shortages of labour and material, inclement weather, inability to obtain building permits, or "acts of God".

Winn Builders' spokesperson Matthew Nicolas said in an email to CBC News, "Mr. Boiteau was represented by a realtor and his lawyer reviewed his contract to purchase a unit, which clearly states that there may be delays that occur in construction and the construction date is not guaranteed."

"The language is very clear, and his lawyer and representative's role is to ensure he understood the risks involved. Winn Builders is in no way in breach of this contract," Nicolas wrote.

He added the company is looking at options for a mutually satisfactory resolution to Boiteau's request to cancel his purchase.

Buyers warned to be careful

Lawyer Robert Tyler, who represents buyers, said condo contracts are always biased towards the developer.

"I think purchasers of new builds have to be very careful what they sign. Because often these contracts very much favour the developer," said Tyler.

He didn't represent Vallis or Boiteau, but he said buyers should negotiate some protection clauses into their contracts.

"So that if it's delayed beyond a certain time then they would have the ability to terminate the contract and get their deposit back," Tyler said.

He said buyers should also make sure their deposit is held in a trust account, either with the real estate broker or the builder's lawyer.

"Make sure the developer is reputable, that he's got a track record, that there's some financial stability behind the developer," Tyler said. 

He added that prospective buyers can also try to talk to clients who have purchased condos in the developer's other projects to see what their experience was like.

Lynne Dubienski, real estate agent for D Condo, said Vallis had an opportunity in 2014 to cancel his purchase but did not, even though some other buyers did.  Vallis disputes this.

Dubienski said the developer may give him another opportunity to get out of the purchase.

But she and D Condo lawyer Giesbrecht both said buying a condo that's not yet built may not be right for everyone.

"If you're really risk averse and you really need certainty on your timing, buy an existing unit," said Giesbrecht.

Under the Manitoba Condominium Act, new rules in effect as of February provide a seven-day cooling off period for condo buyers to back out of a deal.  Under the old law, the cooling off period was 48 hours.


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