In a townhouse development project located in the city of Barrie in the Greater Toronto Area, buyers are facing a bleak situation as the project has filed for bankruptcy and been taken over by the lender, leaving the development in limbo and buyers unable to retrieve their deposits, feeling frustrated and helpless.
One of the buyers, Melenie Chan, signed a pre-construction condo agreement in September 2018, paying a deposit of $25,000 for a two-bedroom unit. “They took my money, it’s upsetting,” Chan told CBC, “and I can’t do anything about it.”
Chan and many other buyers had purchased units in the Urban North townhouse development, consisting of over 1,000 apartments and townhouses across from the Barrie South GO Station.
The developer, based in Richmond Hill, Pace Developments, who developed the Urban North townhouse project under the name Mapleview Developments, is now under the management of Canadian restructuring company KSV Advisory due to insolvency.
The project is situated near the intersection of Yonge Street and Mapleview Drive E., approximately 100 kilometers north of Toronto.
The Canadian real estate financial company KingSett Mortgage Corporation, one of the lenders for the project, revealed that Pace Development owes over $47 million plus interest. In addition to owing millions to at least three other lenders, the project has ten construction liens registered against it, with the largest lien held by Condrain Group worth over $4 million.
Anna Mutetwa, who purchased a pre-construction condo in August 2019 with a planned occupancy in October 2022, now faces an uncertain occupancy date and may not be able to retrieve her $25,000 deposit. “I missed giving my children a secure home,” Mutetwa said, resigned to continue renting.
Real estate lawyer Mark Morris explained that apart from waiting for the takeover process to progress, buyers have limited options. The takeover entity could choose to cancel existing purchase agreements and sell the project to a new developer.
Considering the significant funds already invested and lukewarm demand for new homes in the market, Morris suggested that the takeover entity might opt to fulfill existing purchase agreements and appoint a general contractor to complete the project to maximize the interests of the lenders.
The Urban North townhouse project was originally planned to be completed in six phases. KSV indicated that out of the 311 units in the first two phases, 264 have been delivered, with the remaining 47 units partially completed. While many units in the third and fourth phases have been presold, work on the final four phases has yet to commence.
In April, the takeover entity stated, “Purchase agreements remain fully valid but subject to compliance with the terms of the receivership.”
Back in 2021, the Urban North project was embroiled in a scandal when Pace Development cited price increases to cancel pre-construction agreements with around 70 buyers, offering them the option to either reclaim their deposit and walk away or pay an additional $100,000 to repurchase.
Premier Ford deemed this action “unacceptable,” asserting that developers should bear the cost of price hikes if they had signed agreements and agreed to final prices.
In November 2023, the Housing Construction Regulatory Authority (HCRA) brought Mapleview before its discipline committee, alleging that the company “illegally terminated dozens of home purchase agreements and misled 33 homebuyers, unethically extracting over $3 million from them.”
The date for the HCRA disciplinary hearing related to this matter is yet to be determined.