Last week, the Liberty Development Corporation notified over 1,000 buyers the Cosmos Condos project at the Vaughan Metropolitan Centre was cancelled. They cited “unsatisfactory financing terms” and called buyer’s attention to early cancellation language found within the sales contracts.
The Role of the Real Estate Agent
MThis situation highlights one of the many roles a good real estate agent plays in purchasing a new home. Ken McLachlan, CEO at RE/MAX Hallmark, states, “transparency is important when creating opportunities for clients to purchase a new development. We have to help our clients become more aware of the language of the agreement they are signing.” New construction comes with risk, and understanding patterns and possibilities associated with this is essential to understanding and managing that risk.
Frequent Condo Cancellations
The Cosmos Condos cancellation is the ninth such cancellation in the Greater Toronto Area this year alone. While Liberty Development Corporation has promised to return deposit cheques, buyers want more. Currently, “there are no consumer protection provisions for this segment of the Real Estate market and there should be,” says Barbara Brindle, Managing Partner and VP of Career Development at RE/MAX Hallmark.
Vague Explanations Leave Buyers Frustrated
Buyers express particular frustration about the cancellation, as they feel they do not have adequate information. They also express suspicion about the reasons given for the cancellation.
Tarion Corporation is the provincial body that regulates and licenses new home buyers and vendors. They have requested information from Liberty, to ensure it is in compliance with their obligations as registered vendors and builders. However, Tarion has stated their findings will remain private. Vaughan Ward 1 Councillor Marilyn Iafrate has threatened to subpoena the records and make them public, in support of her angry constituents.
New Consumer Protection Laws?
Steve Tabrizi, COO at RE/MAX Hallmark, suggests protective measures such as government intervention or an insurance policy under the Consumers Protection Policy would help mediate the risk involved in new development projects for both consumers and developers. Implementing insurance policies or enhancing existing insurance policies available, such as those provided by Tarion, could help protect buyers and ensure they are confident in their life’s biggest investment.
Looking for a Condo?
While Cosmos Condo buyers are angry, the actions of the Liberty Development Corporation don’t surprise the professionals at RE/MAX Hallmark. Brindle notes, “most buyers [don’t] realize how many projects fail to launch or come off the shelf after a sell out and get re-packaged by a ‘new’ company who are often comprised of the same investors and/or parties that were involved in the original project.”
Ready for a New Place?
Whether you are buying or selling, let the experienced real estate agents at RE/MAX Hallmark Realty Ltd., help. We offer one on one service, whether you are buying, selling, or both. With nine neighborhood offices to serve you, we are bound to have a real estate agent who can help you find the home of your dreams. Contact us today.