When he placed a pre-construction home deposit with an apartment for his parents-in-law in a new apartment complex in Mississauga, Ont., Javed Yusuf thought his dreams of buying a big enough house for his family – and his father living with them in Pakistan – they finally came true.
It’s been almost three years since he left the money, but today the project has been canceled and the builder says he keeps his $ 150,000 deposit – unless Yusuf agrees not to sue.
Meanwhile, he and his family have no new home to move to, and his aging father remains in Pakistan.
“We’ve been planning this for so long,” Yusuf said through tears. “It’s an honor for us when our parents live with us.”
In 2019, Yusuf paid a home deposit in Longview Ravine Estates, a 45-property complex of Exquisite Bay Development Inc., also known as Bay Homes. The company charges the site as a luxury development of detached and two-story homes that wind toward a gorge in northern Mississauga.
But the project went awry, and last month Exquisite Bay sold the land to a different developer.
Buyers told CBC News they were never informed of the sale or fate of the project; instead, they received letters dated April 11, 2022, from Exquisite Bay stating that they were in breach of their purchase agreements and that the company was retaining their deposits unless they agreed not to take legal action.
The letters do not mention the sale or cancellation of the project.
“They seem to be holding our money hostage,” said Kereze Predovic, who also joined in 2019 and expanded her family with the expectation of moving to the new house.
“It simply came to our notice then that we were being held hostage. For the last three years, we’ve just been waiting. “
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CBC News spoke with half a dozen people who are part of a group of approximately 30 buyers who came together to try to figure out what to do next. While Exquisite Bay maintains that all buyers have breached their purchase agreements, buyers disagree.
“Why are they accusing us? What should we do? How can we take another house?” Said Predovic. “Our price is out of the market because we bought our house three years ago.”
In a statement, Exquisite Bay President Ahmed Yusuf said the company was unable to continue the project “due to circumstances beyond its control, including delays in service, cost problems and inability to sustain construction financing.”
“At the same time, not all buyers had fulfilled their purchase agreements and therefore Exquisite Bay had no obligation to close the sale or return the deposit. In these circumstances, Exquisite Bay had no alternative but to cancel the project and sell the land to another developer, “said Yusuf.
Exquisite Bay says not all buyers are fulfilling the sale agreement
Yusuf said that most of the buyers who did not fulfill the contract of sale did so because they did not provide the company with the correct documentation for the mortgage commitment.
Buyers said their financial documents were approved by the company and its sales agents. They stated that the contract of sale stated that after the initial signing period they had 14 days to provide supporting documents on request. But Exquisite Bay did not raise any funding problems until last month, they said, in a letter terminating their agreements – three years after they were signed and when the project was stalled.
“It was really like a blow to the stomach,” Predovic said.
Picture of a home in Longview Ravine Estates. Exquisite Bay Development Inc. sells this house as a four-bedroom home with an option for an apartment for father-in-law. (Longview Ravine Estates / Facebook)
Yusuf of Exquisite Bay said other buyers were defaulting because they had put their houses on the market, which also violated the purchase agreement. One couple received a letter from Exquisite Bay saying they had announced their house for rent online, but the couple said they had not tried to rent the house – it had never been built.
All buyers were asked to contact the company’s lawyer, and those who did were offered their deposit, plus six percent interest each year, Yusuf said. But to receive it, buyers must sign an agreement pledging not to take legal action.
He added that some buyers have agreed to the terms.
But both Predovic and Yusuf said they were considering their options. They want the builder to “do the right thing” and return the deposit without attachments.
“Our mental health and financial situation are negatively affected, so I do not intend to simply agree to their terms,” Predovic said.
Delays in construction have dragged on for years
Exquisite Bay began marketing Longview Ravine Estates in 2018 and, according to the company’s social media, construction is “in full swing” in January 2020, although it does not have all its building permits at the time. The project is sold out by September 2020.
In March 2021, the company’s request to renew its builder-seller license was denied, according to the Ontario Housing Regulatory Authority (HCRA). HCRA said it could not reveal the reason for this unless the matter was appealed, which Exquisite Bay did not do.
Exquisite Bay did not answer questions in the minutes related to its license.
Azfal Chowdhury says he and his family have been passing the site regularly for the past three years, looking forward to seeing any construction on the site. (Angelina King / CBC News)
Just weeks after its license renewal was denied in March 2021, the company issued a letter to buyers postponing their closing dates from July 2021 to November 2021. But November 1, 2021 came and went.
Exquisite Bay then sent a letter dated November 9, 2021, stating that the land service was over. He also promised buyers that construction would begin soon as the company is in the process of obtaining building permits.
“I was full of anxiety,” said buyer Afzal Chowdhury. For the past three years, he and his family have passed the site regularly, eager to see if there has been any progress.
“We really didn’t know what their plans were. We have asked many times and they just give us hope.
In a statement to CBC News, Yusuf said: “We are and are acting in good faith and honestly in a difficult situation.”
Better buyer protection is needed
Mark Morris, a real estate lawyer who is not on the file, said pre-construction sales contracts were written in favor of developers and buyers were “at the mercy” of their jurisdiction.
He said that whichever party wins next month’s provincial elections must introduce better protection for the buyer for pre-construction sales, including legislation that imposes a fixed purchase price and allows buyers to register their land sale agreement. on which it is assumed that the property will be built.
“I want a government to strengthen and actually help those parties that are moving forward with the biggest purchases in their lives, so that they do not end up in this scenario,” Morris said.
The land in Mississauga, where the project was planned to be built, is empty. (Angelina King / CBC)
Exquisite Bay bought the land in Mississauga, Ont., For just over $ 21 million in 2018, according to real estate documents, and sold it for $ 38 million to Vandyk Properties last month.
In a statement, Vandyk’s vice president, managing director Sherman Chan, said the company kept the project intact and would not make any drastic changes.
He acknowledged that Exquisite Bay buyers are in a difficult situation and said Vandyk would seek to give them an expanded opportunity to buy in their development, “in the hope of ensuring that they are heard and recognized”.
But Yusuf, Predovic and Chowdhury said that even if they agreed to the terms of Exquisite Bay and returned the deposit, they probably could not afford new homes in the current housing market.
All three said that although they understand that projects do not always go according to plan and costs can increase, they want Exquisite Bay to be more transparent when things start to go wrong.
“Why doesn’t the builder talk to all the buyers? Maybe there was a better solution than that,” Yusuf said.
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