Sliver of hope remains for Urbancorp home buyers
Buying a home before it’s built comes with a few advantages, like being able to customize the home and typically take advantage of lower prices. But there can be a risk to buying a home pre-construction too. Mainly, that you might not get what you paid for.
When you put a deposit down on a pre-construction home, it’s important to remember that you aren’t a homeowner yet. Lots of things can happen before your home is built and handed over to you. In Toronto, some buyers found that out the hard way when the developer they bought homes from declared that it would be restructuring and selling off some of its property under the Bankruptcy and Insolvency Act. That means anyone who put money down to own homes in those developments no longer has any right to the home they were promised.
They aren’t even really entitled to refunds for their deposits. Ontario’s home warranty agency, Tarion, can provide deposit refunds up to $40,000, but that won’t be enough to recover the full amount of everyone’s deposits.
And so, some are seeking legal help. Dickinson Wright is representing several of the Urbancorp buyers and one of their lawyers told Toronto Star that the buyers may have a small chance of still getting their homes if they could get the court to require the purchasers of the land to honour Urbancorp’s agreements with the home buyers. If not, they can try to make sure they receive their full deposits back as well as having their legal fees covered. They also would like to see that the home buyers profit off of the higher property values instead if having that value taken from them.
“The law generally has permitted the purchase agreements to be disclaimed, but there is a development that is occurring in the law that is providing some hope for purchasers in terms of preserving their rights,” said Lisa Corne of Dickinson Wright.