Why this Canadian couple walked away from $140K after dispute with home developer
Вставка
- Опубліковано 22 лис 2023
- CTV’s Jeff Pickel hears from a Guelph, Ont. couple who claim they’re are out more than $140,000 after a dispute with a developer.
#housingcrisis #housingmarket
Subscribe to CTV News to watch more videos: / ctvnews
Connect with CTV News:
For the latest news visit: www.ctvnews.ca/
For a full video offering visit the CTV News Network: www.ctvnews.ca/video
CTV News on Facebook: / ctvnews
CTV News on TikTok: www.tiktok.com/discover/CTV-News
CTV News on Twitter: / ctvnews
CTV News on Instagram: / ctvnews
CTV News on Reddit: / ctvnews
---
CTV News is Canada's most-watched news organization both locally and nationally, and has a network of national, international, and local news operations.
They forced them into a situation there was no way out of ,then took their money. There needs to be laws against that .
This is Cana duh we’re talking about, not the United States! Do you really expect any better? 🙄
@@747-pilotHey doofus, you know builders screw over hard working Americans also, right? It’s not a “Cana-duh” thing 🤦♂️.
We have the same sleezeballs here.
@@747-pilot Don't be so hateful on Canada.
why not look at the fool running it. guys a moron i work for all kinds of builders and alot are doing this.@@rebeccahenderson7761
You actually believe Ameriduh is any better than Canaduh? hahahaha@@747-pilot
There should be laws preventing builders from this kind of extortion.
Those laws are in place, they didn't read or understand the sales agreement
WTF,, Fusion is an Asia owned company ,, these immigrants need to be fined , and deported out of the country ,,, sounds like in this case ,, The Lawyers were in on the scheme ,
the builder didn't do anything nasty, that's why the couple said it was not the builders fault. They purchased the house for a certain price, the market dropped out from under them, and the bank likely wouldn't finance the full purchase price because the house isn't worth that much. If they didn't walk away, they would have owed the difference between what the bank was willing to finance, and what the purchase price was. It could have been another 300K that the couple didn't have. Either way, they are lucky the builder was nice enough to just take the down payment and sell the house for current market value and probably not lose their shirts so to speak, which is why they were willing to let them off the hook for potentially hundreds of thousands of dollars that they still owed the builder.
It's not just new builds, anyone at any time can buy a house and the market can collapse before posession, a lot can happen in real estate in 90 days. The bank at the last minute might say "oh we said we would lend 500,000 to mortgage this house, but now it's only worth 350,000. We will not give you the other 150,000 because a 350,000 house is not enough collateral for a 500,000 loan"
@@daxlarsen2121 So, was it the developer or the condo corporation who hiked the maintenance and occupancy fees? If the house was devalued because the bottom dropped out of the market, shouldn't those fees be lessened rather than increased?
When you invest in real estate, there is always the risk that property values will fall. Especially if you buy when prices are at historical highs.
Happy that this developer was named and shamed. Once the deposit is made, there should be no changes.
This is happening everywhere in Canada as appraisal value of house comes low then the price they bought the house from builder.
I think they should have lawyered up. If the contract is misleading you can still sue. Sounds like a cash flow issue
@@scottolson5498but they had a lawyer it sounded like from the video
@lililinda6947
If this is so. Hopefully, the lawyer has professional liability insurance.
Always check your lawyer out by asking for a certain document.
If your stupid enough to buy property in a country with weak laws no rights and justice then you kinda deserve it. Its set up this way for a reason, so you lose.
Never, EVER use the builder's lawyer to save on legal fees. Builders offer this option on purpose. Its tempting to save $2K, but if something goes sideways, that lawyer will not represent you. ALWAYS use your OWN lawyer if you are building.
Stellar advice!!
$140K is insane. They could have taken that down payment and BUILT their own TINY HOME.
although better, essentially your lawyer can do nothing. The contracts are designed to favor the builder. It's a sad situation indeed.
Even better. If you find a property for sale by the home owners, you can hire a barrister and save even more money. Realtors fees add up to tens of thousands of dollars depending on the price of the house. A barrister will cost only a fraction of that.
ur own lawyercan,t be trusted either i have found , they are slopy don,t really stand up for your interests
Greed is destroying our society.
got that right
Welcome to Ford the cons Ontario. Life is always more miserable and expensive under conservative govts@bbbj6583
Just look at downtown Toronto. Nothing remotely related to careful planning, but pure greed.
@bbbj6583 Cry harder Northern MAGAt.
Ever heard of buyers beware?
Never put money down on a house that isn't built
Wise advice.
In a to-be condo corp anyway.
@@djayjpUnless you are the one building your own anyway. Quite the warning to anyone thinking of going this route.
Way things are going I may never own a home. That being said, the way suddenly about 20 years ago homes under construction suddenly had chip board walls kinda makes me not want one.
@@aidenschvatkok5732 So buy one that was build before that time, I would agree that the quality of building materials has gotten worse during the last 20 years, especially wood.
Occupancy fees should be illegal. Or at least capped at a certain amount at the time of signing the contract agreement
Occupancy fees pay for local property taxes and electric/hydro bills. 5k does sound outlandish, but, it doesn't go to nothing. Essentially, once they would've moved in, the city wouldn't send them bills from previous months because the builder would have to pay them. Something must've gone wrong with city hall if they were asking for well over 5k/month.
@@user-eg3wc6ie4x 40k/6 month for property taxes/bills doesn't sound right. What else is in the occupancy fees?
@@user-eg3wc6ie4xoccupancy fee not only consist of city’s charge and maintenance fees, it primarily made of mortgage interest of unpaid home value. Since the mortgage rate has skyrocketed, the interest amount for the unpaid money also jump. Nonetheless, the initially assessment of city’s property tax is outrageous. I have heard someone’s two bed room condo be assessed valued more than millions and got charged accordingly, you can always get reimbursed from the builder after you got your proper tax slips for the difference though.
How can they have Hydro bills before they even move in. Sounds like more purchase and or builder regulation is needed.@@user-eg3wc6ie4x
I think it has to do with the increase of interest rate between 2022 and now @@user-eg3wc6ie4x
Canadians need laws to prevent builders from robbing would be home owners.
Canada has tons of laws they need to start respecting and enforcing them
Welcome to Ford the cons Ontario. Life is always more miserable and expensive under conservative govts
@@Mr.chickensoup wouldn’t the lawyers know these laws?
@@JenuinI’ve had horrible luck with lawyers. It seems like they want to charge the most money for the least work, but there’s no end to it. You pay them $4000 retainer, but it’s all gone in no time in fees. $120 for a letter that took 5 minutes to write. $600 for a half hour phone call.
Anyway, my guess is their lawyer failed to explain their exposure to fee increases prior to signing.
SEE ABOVE. (alter the calibre to suit your requirements.)
The builder cornered them into losing their deposit. Not right at all. They should fight it in court but unfortunately there's no law stopping condo builders from doing this.
For $140K they could have built their own home.
@@Chicago48 assuming they had the land to build on : then there’s the well, septic , lot levies building permits etc.
@@ladyluck5248 A better point probably would be for $140K they could have built a tiny home or put a big down payment on a real home. Yea, *I WISH* I could build a real home for $140K but in theory you could if everything in the world was just perfect for it.
@@Chicago48how true. And also have a bigger house and a smaller mortgage
no they didn't , why do you think the builder can sue these two morons. They didn't read the fine print. Giddy up consumers I call them.. typical debt slaves. Notice how they didn't mention they didn't even make that 140 grand.. it was a bank loan. So now it just piles on their already mortgaged lives. You know that guy drives an $80,000 truck he doesn't own.
Feel bad for the buyers. So much of corruption in real estate/mortgage industry in canada
Yep... even the lawyers are playing for the wrong side these days.
WTF,, Fusion is an Asia owned company ,, these immigrants need to be fined , and deported out of the country ,,, sounds like in this case ,, The Lawyers were in on the scheme ,
them realtors willl say housing ONLY GOES UPPP UPP AND UPPPPPP
@@gregjsinclair
If it is Asian owned, it's likely the owners are not in Canada at all. The local action will be handled by a "management company".
lol! You meant to say Canada is a corrupt shithole
There’s corporate-corruption like this that is allowed and yet I the next breath the government throws out the term of “housing crisis”. Gee, wonder why there’s a problem of owning a property for any “normal working” person! 🇨🇦
This is so sad . Contributing members of society do not deserve this.
Any chance you can define "contributing members of society"?
If you make more than 100k/year, you're a contributing member, duh.
@@El-Dorado930 I see you put a financial price on being a contributing member of society. You are so wrong.
@@johnwattdotca I was being sarcastic...
@@johnwattdotcaof you pay more tax yiu are definitely contributing more.
This makes me sick to my stomach!! I am so sorry for what they have been through and lost :(
I agree. $140K is no pocket change. I"m impressed however, at how calm they are considering everything. I really feel for them losing all that money.
We had a similar experience last year. We almost lost our house and just finalized the negotiations for the lien that trades put on it. We paid 80-100K more than we were supposed to and the house was never completed by the builder. Can't sue because of the "corporate veil". Hubs and I aren't much for government interference, but something like this devastates families financially and there's no recourse. Something's wrong with the system.
Governments should protect buyers via legislation.
I'm sorry this happened to you and I always feel bad for the trades, but this was their only recourse to recoup their time/material losses
Oh so you finally understand the problems with free market anarchism?
Do “not” buy a newly built house in the city was their mistake, but rather instead the answer is to purchase an existing older house that has already been built long ago.
Sorry you had to go through such an ordeal, there should be a clear recourse..no one should have to go to extremes of losing so much.The system isn't working.
The lesson is: Do no buy pre-construction.
Facts!
Yup. All you’re doing is buying a promise from someone you don’t know someone who doesn’t care about you.
Further: Do not buy before 'inspection' by an independent expert and city/state/ 'registration' including a a clear-cut, waffle-free WARRANTY for(say) FORTY YEARS. (ANY other business offers a comprehensive warranty: even solar-panel producers offer 30 years). Bottom line: MAKE IT PERSONAL!
We did. It’s ok if done right
The lesson is: leave Canada. It sucks.
Nope. They should get their money back less 3% for admin fees. This is disgusting and should not be allowed.
So the builder should take the loss? Why?
@@MrWookie1981 Exactly. Builders didn't devalue the property, the market did. The builders lowered the price to sell the remaining units. They signed a contract for a certain price and the value usually goes up but they were caught and the value went down. It's not on the builder to "price match" on contracts if the value goes down.
@@MrWookie1981 The builders can write off losses and absorb them. Builders are usually corporations so that is rarely, if ever affects their personal financial status. There has to be more equitable laws for both sides. The builder will still sell the home and most likely will still make a profit.
@@cavelleardiel And you know this...how? My sons' father-in-law is a self employed house builder and if you really believe that every house is always sold at a profit anywhere and at any time no matter what the market is at the time of sale then you don't understand how the free market works in practice. Fact is that the builder who puts up the money to build the house runs a huge risk that the market will turn against him and that loss needs to be paid for out of the profit made by selling an x amount of other houses. "The builder can write off losses and absorb them", clearly you have never been involved in house construction.
@@freddexta3363 A builder should not be able to walk away with a 150,000.00 deposit. A percentage that is reasonable is acceptable.
What is their lawyer doing? That's super shady of the builder in any case though.
The lawyer's job is just to explain the contract. The client is still responsible for deciding whether or not to sign it, and accepting the risks of real estate investment if they do.
@@bartholomewcubbins9723 Lawyers job is getting your money
@@bartholomewcubbins9723 Lawyers job is to advise. When I bought my house, the lawyer explicitly said "You need to amend the contract and put caps on these couple of fees. They won't necessarily agree, but it could harm you in rare cases"
This report formed more questions than answers. If the home was devalued by 200,000 would that 140,000 down payment be a greater % ? The public is not informed at all by this reporter. This story doesn't pass the smell test.
It does if you paid attention or if you went and read the story
@@jumbome7420 where did the reporter explain how a 200k drop in value doesn't mean the down payment is worth more on a %? Excuse me that IS his job. It's so bad I wouldn't waste my time reading anything that writes.
Home was devalued as in it was bought for $1M, then by the time it was ready to be closed, its value was $800k (because housing market is down right now).
So they are to buy something worth 800k for 1M. So the bank will approve loan for 800k-140k, and they will need to make another 200k payment to get to 1M they promised the builder.
Basically a case of crappy luck that they bought at the peak.
@@MarkFreemanYVR whatever that's supposed to mean?
@@davidmcnamara8024@DisturbedRocks explained it well. Do you understand it now?
Wow! nice couple. So sad to see it ended this way and respect them for their attitude over this very nasty situation.
Yes , it's refreshing to see anybody remain this calm after being fleeced for 140k . They accepted the consequences and walked away . No yelling , no screaming about how unfair life is or how corrupt the system is . They just wanted to make light of what happened to them so that everyone else is aware of this builder's tactics .
what tactics?@@randoir1863
So true! I can’t imagine getting scammed for 140k and be that calm and logical about it.
I am not sure if you're being sarcastic. and why remaining calm matters at all. @@randoir1863
This is absolutely sneaky behaviour.
Feel terrible for this couple who lost a great down payment for another home.
You are not alone we are going through the same situation and there should be laws to protect homebuyers as well.
I wanted to buy a pre-sale home so I could customize it, but stories like these are exactly why I gave up on that and bought one that's already built instead.
The builders are masters at getting around the bumps in their world.
Not really, they are probably taking losses as well. Why else are they selling houses for 200k less than before?
@@TheChangNetwork Another simpleton!! They're selling houses for $200k less than before because they were OVERPRICED by $800k 'before'. I'm in Australia, and can build a decent 'Familiy Home for under $20k. (sic)
Give you discounts initially but recoupe those costs with the fees later. Legal bait and switch. They should sue.
yes sue because the company wanted them to live up to the terms of the contract they signed. sue for what?
I'm telling my kids to save their money and get the heck out of Canada.
Give it another year or two things are going to change in this country, have them move to Alberta, I'm serious.
alberta is going to be a major economic power house.
@@brucemaddox 🤣🤣🤣 little pee pee is too soft he's not going to fix a thing.
@@brucemaddox A country full of cowards scared to be called racist and supremacists will never be able to right itself.
@@brucemaddox ROFL... oil is done.
@@evalangley3985 You're off oil and gas?
Only 6% of Albertans work in oil and gas.
End Times Prophecy has them fighting over oil.
~Do “not” buy a newly built house in the city was their mistake, but rather instead the answer is to purchase an existing older house that has already been built long ago.
Those fees mentioned in this video are completely obscene.
Moral of the story, don't buy new construction.
Buy resale instead.
Then there's no chance for a crooked, immoral builder to add any kind of fees.
My friend and I went out to the Mount Hope area in Hamilton to pick up a chair advertised on Kijiji, and the seller had just moved into a new townhouse in the area, and I asked her how much they're going for and I almost choked when she said $800,000.
Insanity.
This is a crappy builder nothing to do with new construction.
My family went through something similar, still going through after losing so much 🙏🏾
losing.....
Should this fall back on their lawyer…why is there a need for lawyers if these things can happen anyway?
Did I miss??? They received an email from FUSIAN"S lawyer, and I didn't catch they even HAD a lawyer look at the contract and advise them.
Then sue the lawyer. I mean if they are made aware then they are just stupid. They seem pretty with it.
Apparently AI can write up a significant contract. This is where crypto "Smart Contracts" would be a life saver. @@user-zp7jp1vk2i
@@user-zp7jp1vk2ithey said “the lawyer” so yeah it’s unclear but sounds like it’s not illegal anyhow
100 percent correct
The couple should make a claim against their lawyers’ errors & omissions insurance.
Have to sue them which is an expensive proposition after losing all that money.
Why does everyone think the developer is to blame. They said they were lucky - because the developer didn't sue them for his losses due to them backing out of the sale. They gambled on the market and lost.
@@TheTruth-cg8vjwhat losses though?
@@TheTruth-cg8vj Just because it's not illegal doesn't mean it's not unethical. They wanted to back out of the sale because they found the updated terms to be unreasonable and they didn't know how long they would have to pay occupancy fees for. They consider themselves lucky because the developer accepted the agreement meaning they no longer have to deal with this mess. This has nothing to do with gambling on the market. This is the developer behaving badly.
@@ktktktktktktkt There were no updated terms. They're just no longer happy with the original terms they agreed to a year ago. And of course, no one would be happy if they bought near the peak of the market and then the home's value dropped by over $200k. But they were lucky they could cut that $200k+ loss down to $140k.
Buyer Beware though even using a lawyer the checklist of what's WRONG with this contract (even the lawyer might miss) is that builders are in a very demanding, competitive environment. And the survivors make sure that contract benefits THEM and gives THEM control and/or an out.
" *builders are in a very demanding, competitive environment* " ??? *No they are Not* ! Not only has the Canadian government increased mortgages, apparently, they have also decided to stall and/or stop the construction/building of houses. Therefore destroying any hope for hard working Canadians to own a *HOME* .
Lawyers are useless when it comes to this kind of thing. I dont think they even read the contracts.
Be your own lawyer. Is hard work but can be done. I’m currently suing the developer of my pre con
Never buy a house that you can't step foot in!
ALWAYS!!:- 'It's YOUR money Ralph; YOU make the rules.' And NEVER pay for ANYTHING except COD. Failing that, send me your address:- I have an unbelievable deal for you!😏
if your house is 200k under valued. you will have to bring 200k during closing if you don't have it you won't close and the builder will sue you for the difference if it is sold to another person. They probably don't have 200k that's why they walked away. That is why they said they were relieved when the builder accepted to take the downpayment and not sue because it would have cost them more money and we are not even talking about the new high interest rate. All the other details they mentioned (condo fees etc) are pointless. The under value property is the main reason. A builder cannot sell property 200k over market value, no-one will buy them. It is just an unfortunate situation
Yeah they are dishonest and disingenuous
They don't qualify for the house anymore with high interest rates.
Yes, nobody would walk away from $140,000 just because of a few months of occupancy fees.
At least someone gets it. And the only reason the occupancy rates went up is due interest rates increasing. It is not excess profit to the builder.
@@MrWookie1981 Seeking to understand how's occupancy rate related to interest rate ? I thought both are separate , occupancy goes to the management and interest rate is what the bank offers.
I found myself for 10 months in the same situation. I paid occupancy fees for 10 months. Literally the day I took possession I slapped a for sale sign on the place, sold and moved 60 days later.
Cant all of these hardships be avoided with a little research beforehand? Its just an assumption. I have no idea.
@@johndor7793 The problem is if the construction is delayed the occupancy costs often are used to cover the loan the builder took out to cover the construction costs while he gets the time, materials and resources to finish the construction. Under normal circumstances, you would have taken possession and then your mortgage would have paid the builder for the house. but if the house is delayed the builder still has to pay his loan and without the mortgage money, there is no cash to pay it. Some larger developers cross-finance projects spending money from one project to pay the loan on another. That can often collapse and leave both projects in trouble.
Ya. Looking back on how I phrased the question feels kind of dumb on my part.
Prebuilds can be safe and okay. Just don’t go with small builders and do a lot of research on the builders before signing.
Oh no...Fusion is a fairly big builder in Southern Ontario...Guelph, Kitchener, Cambridge... I'm so glad this is out there....
I'd trust a small group of builders before a large company. There are far more crooks in suits.
Wise advice. Track record matters because pre-builds come with a lot of risk (which is why you buy at a "discount").
@@shrimpy7862 Exactly, it's the predatory mega corps you have to look out for.
Canadian laws seem very backward when compared to the New York State laws. Builders and developers cannot cheat potential homeowners the way they are doing in Canada.
I don't understand! Why did they walk away from $140,000 to escape $40,000 over the next 6 months? Not only that! They were ready to pay $309+$3250 which would come to $21,354 in the next 6 months. So basically they saved $18,646 by loosing $140,000. That doesn't make sense at all. Or there's something else that this news didn't cover.
They most likely ran out of money. Probably don't have financing from bank at these rates anymore either.
It's a difference between money now, and money you already spent. While they did already put down $140K in the past, they may not be in the position to pay the ~$6,000/month as things currently stand, especially with no clarity on when those payments will end.
agreed. even I am confused as to why they walked away and they are saying the builder is also not to be blamed for this
They said there is no end date for occupancy fee, that means they will pay that for ever????
@@nb1638yes I have a house you can pay me forever for …
Obviously these criminals get away with fraud etc.!!!! That’s ridiculous!!!
This is crazy. I can’t believe they’re just walking away.
Walking away, they lose $140k. If they complete the deal, they'd have a$200k loss due to the falling real estate prices. So, painful as it may be, walking away is a logical choice.
@bartholomewcubbins9723 I'm confused though. Are they planing on selling the house right away. Can't they live there fir 10 years and sell when the houses value goes back up
@@allanthomas6097 If they have the cash to complete the deal, they could do that. But suppose their purchase price was $1,000,000, so they still owe the developer $860k. If the home's value has dropped to $800k, they could instead buy another similar house for $800k and save $60k. And if they're willing to wait another year, those same houses might be selling for under $700k.
The more likely scenario is that they need a mortgage to pay off the remaining $860k. But if the house is worth only $800, they might not be able to get a mortgage for more than $720k. That leaves them $140k short. If they don't have that much saved up and can't get a loan from family or friends, they can't even complete the purchase.
@@allanthomas6097 You cannot get a mortgage if you're under water on the property value. You think the bank will give them $1million mortgage for a place valued at 1million as they already paid the 140k down payment that went 'poof' in the downturn?
As well they calculated that the 'hosting' cost would be $5-6k a month until Strata was formed which wasn't going to happen anytime soon.
I won't walk away
Terrible 😞 I am wishing this couple prosperity and happiness. Push through this guys. May this make you stronger.
So basically you sign a blank cheque when you buy pre-sale? Seems ridiculous
That's crazy. If this were to happen here, they would burn the housing development, so the contractor would lose too.
How is any of this even legal ?
Why is not legal? They are lucky they are not getting sued by the builder for losses.
It's in their legally binding contract!
That’s exactly what I thought. Why wouldn’t they sell it back
To the developers after it was completed.
@@Robsav-yx6vi Why would the developer want to buy it back when they are already selling their other houses for 200k less than before?
They are developers - of course they are money hungry. Never buy pre sale, you don’t know what you are paying for.
Word.
So sad these crooks are promoted by blaming the home owner
Why does everyone think the developer is to blame. They said they were lucky - because the developer didn't sue them for his losses due to them backing out of the sale. They gambled on the market and lost. They put 10% down and the property falls 25% because their timing was wrong, they can't complete the sale now. Oh, I forgot everybody makes money in RE, it's a sure thing. Extrapolate that to 5 years into the future, if you dare.
Clear as mud.
By the way, I payed approximately one third that for an old homestead in a rural setting. $65,000 in house renovations and 25 years later I’ve finished raising a family with very little debt. You have to look out for your self in this world. The laws can be used to take advantage of others as well as protecting your self.
awesome, had a friend do the same.
Wow. Alot of patience on their end. Someone would have had to go meet their maker if that were me.
uh oh...that escalated quickly
I'm hearing stories about this every week across the country. Just happened in Alberta
Its already unfair to be in Canada.....now this.
I read about Ukraine being a buyer's market, check it out! 🇨🇦
What the hell is an occupancy fee?
Typically you see these when a build is delayed for some reason beyond it original occupancy date and represents the amount the builder is paying to the bank on the load they took to build the house. At least that is what it is supposed to be for. Its called an occupancy fee because you were expected to have occupied the house during that time but are unable to due to a delay in the construction. The money doesn't go straight into the developer's pocket, it actually is going to pay the load the developer took to pay for that house that he is unable to pay since he didn't receive the mortgage money because of the delay and you not being able to occupy the house.
These developers don’t care about the homeowner- they wait to pry onto the next buyer. They know once you’ve signed they have you.
Realtor Broker here: they mentioned the lawyer (who supervises the escrow) but didn't mention their estate agent: it sounds like these 2 entered into a very expensive, complicated transaction WITHOUT representation!
it’s not just in Ontario. I know a couple in Alberta that bought a piece of land and then hired the contractors, but in the end they just gave up on it because the builders are ripping them off every time they turned around. They actually had to give up on the project and go start off all over again, just to get rid of the Corporate thieves and being systematically stolen from at every turn.
But that couple was really lucky that they could do that. Not everybody can do that. if they had been less wealthy, they would have been bankrupted, which I think is probably what these builders do.
There should definitely be some way of knowing which ones are unscrupulous.
Or you could just not buy prebuilds and avoid the whole situation.
If Canadian politicians weren't so busy passing laws to strip citizens of their rights, they have the time to outlaw these kinds of predatory business practices...
What rights? Please don’t tell me you’re talking about masks or vaccines. This is squarely on predatory developers and no protection for buyers.
As someone in the renovation industry I would never buy new. The quality and craftsmanship are horrible. Also occupancy fees are in place because your bank won't give u your mortgage on occupancy only when the building is finalized but the money is due to the builder on occupancy so they charge u.
This makes no sense. There should be laws protecting home buyers from things like this. How do you forfeit 140k of hard earned money. So Sad.
This is bizarre. When I bought a new construction condo in Toronto back in 2013, sure there were occupancy fees but it was only for 6 months and the fee worked out to be less than my monthly mortgage. So for me those 6 months were financially easier. I remember there was incentive for the builder to register the building once it was finished (thereby ending the occupancy fees), but I can’t recall what the inventive was. I feel sorrry for this couple. $150k is a lot of money to lose 😢
it's because interest rates in 2013 are different than in 2023.
What’s an occupancy fee! WTF
IKR?? In your OWN home? Scams & thieves everywhere.
Occupancy fees would have been in the contract. Their lawyer should have questioned this initially and maybe asked for the amount to be confirmed prior to signing. My lawyer was able to get my occupancy fees waived by speaking with the developers lawyer directly. Thank goodness.
They were in the contract for sure. You've seen those pre-build contracts, they're like 40 pages for a reason. The builders have thought of everything. It's why buying a pre-build is inherently risky.
They don’t mind losing $140K ? They must be billionaires.
Exactly my thought, just coz they have to pay few extra dollars in maintenance fee it's not worth losing 140k. Every new builder has occupancy fee, this is basically the fee you pay for occupying yet not owing the title yet coz paperwork and registration with the city takes time. It's foolish of them to move out of this deal, I think they don't qualify anymore coz of high interest rate and they were finding excuses to dump the deal 😅
And not getting sued too.
RIGHT?!!!!!
Wrong, I know them. Lost their life saving. Dummy
@@MM-hw6fz, did you forget the occupancy fees?
Shameful this happened 😢
Any fusion project i would be staying away from thanks for the heads up
I would buy a maintained older house. I don't like dealing with crooks.
no point of backing out the deal. they're building townhomes not a condo apartment. its not like they would there would be massive delays. most likely the home was devalued due to interest rate hikes and they no longer qualified for financing.
Excellent thought. Faced with that situation, you beg, borrow and steal (not literally) the money to close and then re-assess your options.
Occupancy Fees? Why would anyone sign a term like that is beyond me...? Lost "$140k" and feeling "lucky"?
Lawyer should have seen it coming. How can the create and increase fees? It’s not in the contract?
Why the Hell didnt they just assign the property? They wouldve gotten all or some of the money back!!
Depends if the contract allows for that or not.
The value has dropped by $200k since they bought it. They'd never find someone to buy it for the price they paid.
Excellent thought. Here's why maybe they couldn't: most of these contracts require the builder's consent to have the contract assigned. That being said, I don't if they even tried it.
The similar option is beg, borrow and steal (not literally) the money to close and then re-sell ASAP to recoup as many losses as possible.
Such a poor segment. They failed to explain occupancy fees. Is this something with condos. I bought a detached house few years ago, did not have to pay occupancy fees.
Word.
The buyers want to get out of the contract they already agreed to. The builder wanted the contract to continue and for the buyers to pay the price they agreed to. The buyers walked away and breached the contract, so they forfeit the deposit. That's just how it goes.
Shame on the news for running this story the way they did because it seems to be misinformation.
@@John_IIWho do you work for?
I’ve been paying occupancy fees since July on my condo
Ruthless Builders like Paradise Developers who sold told last phase at higher price are threatening buyers to sue for damages even after keeping hefty deposits. This builder is kind of okay keep deposit and let them go !
exactly! this developer kept the deposit but they could have made more money if they just forced these two to stick to the original purchase price.
Another reason why buying a new home is out of the question.
Call your local MP and MPP and demand they look at the laws here ti keep from getting screwed. Go to the newspapers and just keep pestering until somone gives in.
Buying a house with condo fees. Never heard before. 😢
This is where the GST tax break we approved recently to make housing cheaper for developers went huh
So sad ,disheartening 😢
They should have listened to Brampton realtor. Prices go up up and up only. So they should have kept it.
Yup. Faced with this situation you beg, borrow and steal (not literally) to close. Then you re-assess. Instead the chose to forfeit $140,000 and then run the risk of being sued later if the sale price is less than the sale price to this couple.
@@John_IIThey cannot be sued by the developer.
Occupancy fees should be illegal with any pre construction home/condo. The standard purchase and sales agreement need to change. Everything is in favour of the builder. When the interest rates goes up from the time they sign until occupancy period, they can jack up the fees. They never lose. How is this a business if they never lose? If business was 100% guaranteed profit, then everyone should become a builder. Making purchasers pay 'rent' for a place that isn't 100% complete shouldn't even be legal. When did this occupancy fee thing even start? When my parents' bought homes in the 80s, occupancy fees were unheard of. Give new home buyers a home when it is 100% completed and go straight to final closing.
This is heartbreaking..Hard earned money down the drain
live and learn
better than losing more money.
this is Canada, all our hard earned money goes down the drain.
New builds and precons are very risky. You're buying something that doesn't exist and you're hoping one day it does. Just buy resell. Sad for them though.
ofc it also depends, if you go for a sketchy builder that has never developed before you're just asking for it. But even big well known developers are pulling whatever they can to cancel contracts and keep deposits. It's real easy for them to bankrupt their existing company just to open up another one under a different name. Our laws here are utter trash. Everything from our laws to our government to even our education system needs to be demolished and rebuilt. It's all gone to sh1t
Word. :)
Never buy a condo the fees are going to skyrocket in coming yrs. Due to increasing ins. Rates etc.
It might not be illegal, but it's certainly unethical.
Thank you to the couple for sharing their experience.
Sad but indeed "Buyer Beware"
I lost 100k buying a home. My lawyer was useless realtor was only concerned about the commission and the mortgage agent bottled up everything. I started to drink daily one bottle of wine over in a hour (never drank more than 4 times in life before.) Horrible horrible part of my life.. now can't sell the home as the price dropped too much or can keep it bse the interest rates too high. My lesson never trust your community always look for best professionals.
I lost millions of dollars in Edmonton, Alberta but have hundred of homes in Fort Wayne, Indiana that have done extremely well. Hoping the minimum wage gets hiked soon there.
There is something wrong with this type of business practice , something very very wrong smfh
These dishonest builders need to be stopped. The market is full of dishonest builders and realestate agents.
So always make sure you have a reputable and reliable lawyer to back you up and never trust Fusion or any shady developer (which is most of them). Gotcha.
I don’t understand any of this, and I am in the building industry.
The story is basically misinformation. The buyers want to get out of the contract they already agreed to. The builder wanted the contract to continue and for the buyers to pay the price they agreed to. The buyers walked away and breached the contract, so they forfeit the deposit.
How could it be much worse, where is the lawyer. That would never happen in Alberta
Alberta must be a kinder province than Ontario.
They should be able to sue the builder.
Your paying occupancy fees and maintenance on property you don’t occupy or technically own. That sounds insane.
Obvious. There IS risk with new builds, and it ended up being worth less because interest rates are higher. Seems like a whiny couple
Glad someone gets it. :)
Most likely high interest rates costs led to the higher occupancy fees
I guess that in the contracts should be literally mentioned that terms will not be changed for whatever reason, after signing that paper.
Lol, 3 years free condo fees, then when the fees kick in it destroys your resale value. Then in 20 years the fees are 4 times the original amount and your house is worth half because of the fees.
Never buy anything that has a condo fee, HOA fee, maitenance fee, nothing.
Freehold or just rent something.
I dont pay rent on a house i own. Ever.
So to save $40,000 they walked away from $142,000? I wouldn't have walked, especially since they said they signed the dotted line when prices were cheaper.
They said the condo lost $200k in value since they entered the agreement.
They would lose an additional $60k to cover the last value and then add occupancy fees on top.
It's literally better to walk away and buy the exact same home $60k cheaper.
If they walk away and go back right away for the same house they walk away it will be $200k less plus $60k less.
@@Kadmos I'm not saying they should go back, definitely not. It's just that although I heard them say the home had "lost" $200,000 in value, the only proof I saw of that was a poster offering $100,000 worth of new appliances to newer buyers. And I thought I heard the woman say prices were lower when they signed. I guess she meant rates were lower when they signed.
@@Kadmos I get that if they bought the home for $800,000 and now it's worth only $600,000, they're under water with regards to their downpayment. But it was a paper loss and now they have a real loss of $140,000. All I'm saying is that if I had planned on staying there for the long term and didn't need to cash out at that point, I probably wouldn't have turned a paper loss into a real one if I liked the place, had planned to stay there for at least 10 years, had a lower interest rate than the going rate and could afford the monthly. Because in the long term, they probably would have been fine. If they buy a similar house tomorrow for $600,000, the actual cost will be $740,000 factoring in the lost downpayment, and then they'll also have to come up with another downpayment (so additional lost opportunity cost) in addition to transaction fees, and the same thing could happen again if the market hasn't completely bottomed yet and the paper value of the $600,000 home falls further than their new downpayment. Long story short, buying is risky as a short-term play in markets like this one.
No, they save 200 000$ and lost 140 000$... not accounting for 40 000$ over the course of the 6 next months.
Don’t buy on spec!
This is sad news. I wish the couple best of everything. They and many others looking for a home deserve better
There are large volumes of rushed homes in NE Calgary AB, Cracking foundations, unsupported concrete stairs... Making a home production increase means nothing when its DREG construction. . .
I didn’t fully understand, it was a one time occupancy fee that nearly doubled and the monthly maintenance fee that nearly doubled? I didn’t understand how their property was devalued and their reason to walk away from the down payment.
Tho "occupancy fee" was monthly rent to builder until they 'finished' building the house. Whatever that means.
And that's what's wrong with Ontario. They were scammed clearly, obviously pressured to forfeit their dream. Fix this.
This is criminal. Putting the screws to the customer when they have no way to defend themselves. Shameful!
Why would anyone get sucked into a condo?
gonna buy something I have to rent.