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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