When Arshad Rauf purchased a 495-square-foot one-bedroom condo steps from the Mimico Go station, his realtor congratulated him.
He was one of the lucky buyers to secure a unit in the coveted development, which had easy access to downtown 海角社区官网and was part of a planned master community.
Rauf听wanted to provide his children听with a place they could live while attending university. He feared they鈥檇 be priced out of the market forever if he didn鈥檛 jump on the opportunity.
It was spring 2021, and the market FOMO (fear of missing out) was real.听
鈥淎t the time there was a big rush on anything real estate,鈥 he recalls. 鈥淧eople like myself, in the euphoria, go for it. And then afterwards they find out the stark realities of the contract.鈥
What he couldn鈥檛 have known at the time was the condo would never end up being built. Instead of a vibrant new neighbourhood, there are a few empty lots, and what looks like a the beginning of a foundation sits in a hole half underwater next to the station.听
The 23 Buckingham St. project went into receivership 鈥 a process where a third party takes control of a company’s assets to sell 鈥 in January of 2024.听
It was cancelled in February of this year. Months later, Rauf is still waiting for his original deposit back.
The site is one of eight condo developments听that have been officially cancelled in 海角社区官网since 2024, according to figures from market research firm Urbanation, totalling 1,899 units.
Behind each one is a purchaser听like Rauf, who have seen condos evaporate before their eyes and are often left waiting to get large sums of money back, illustrating the need, he said, for buyers to have more of a seat at the table when things go wrong.
鈥淲e’re the forgotten people of any such projects,鈥 he said. 鈥淵ou feel powerless.鈥
Buying before the shovels hit the ground
In the GTA, unlike in some other cities around the world, most condo units are individually sold before they are built. Those “pre-construction sales” help developers secure the funding needed for a project to听move ahead.听
But this model comes with risks, as Rauf discovered.听
Condos were once a golden ticket for investors, who own听about 65 per cent of smaller units built after 2016 in the 海角社区官网area, according to Statistics Canada. Investors could easily snap up a studio or two, and watch prices soar, often selling them to other buyers at a profit before the deal even closed.
But with prices dropping听and interest rates up from historic lows during the pandemic, the math just doesn鈥檛 add up anymore.
“That model has just completely collapsed,鈥 Matti Siemiatycki, director of the Infrastructure Institute and professor of geography and planning at the University of Toronto,听previously told the Star.听
海角社区官网condo prices were down about seven per cent year-over-year in April, per the 海角社区官网Regional Real Estate Board (TRREB), with sales down 30 per cent.
TD Bank that condo prices would fall a further 10 per cent from the 2023 peak by the end of the year.听
Some buyers have been caught out at closing, facing lawsuits from developers. Others, like Rauf, are left with empty promises and renderings for spaces that never materialized.
Rauf said he鈥檚 not upset that the condo was cancelled 鈥 these things happen in business. What he鈥檚 concerned about is the delay in returning his deposit, the small amount of interest he鈥檒l get back, and the lack of communication around the process.听
鈥淲e should not be left hanging,” he said. “We should not be dragged along.”
Trouble at the site听
To seal the deal, the 57-year-old bank employee put down a deposit of almost $90,000 over a few instalments for his $580,900 one-bedroom in听one of three planned towers.
But as he waited for the project to be completed, there were signs of trouble. By the spring of 2023 it seemed work had halted at the site, he said.听
The Buckingham Street project was to have 748 residential units. According to a report to the court from the receiver, 686 of them had been pre-sold.
Andrew Francis Wallace 海角社区官网SIt was owned by a company that was part of the Vandyk Group, a real estate developer based in Mississauga. According to court documents, the company had an outstanding loan to MCAP, an independent mortgage finance company, of over , plus legal costs.
Vandyk has nine other pre-construction sites also in receivership across the GTA, Tarion, the province’s consumer protection agency that oversees newly built homes and condos,
Vandyk could not be reached for comment and lawyers listed in the receivership documents did not respond to a request for comment.听
MCAP declined to comment.
Through all of this, Rauf said the buyers had little information.
He believes pre-construction contracts are 鈥渙ne sided鈥 as developers can cancel projects,听leaving mom and pop purchasers like him with little protection.
“If people like me don’t invest in the condo, it doesn’t get made,” he said. But “if things have to go down then you will go down.”
The long wait for buyers
In听, was appointed by the court as a receiver on the Buckingham Street project. The court then approved the sale of the site, but no buyer was found.
In the 听that the purchase agreements be terminated, and the buyers were supposed to get their deposits back.
Under the听builders are required to place deposits in a trust, and if the purchase agreement is terminated by the builder they must return the deposits within 10 days.听
The Buckingham was to have 748 residential units, and 686 of them had been pre-sold, according to a report to the court from the receiver.
In mid-March, Rauf said the processing agent for Aviva Insurance Company of Canada, the deposit insurer for the project, gave him a statement outlining听how much he would be paid back 鈥 his original deposit plus two per cent interest calculated only up until that date 鈥 after he provided supporting documents that they requested.听
Rauf took out a loan on his own home at 6 per cent interest to finance the condo.听
鈥淭he value of my money has eroded because of inflation,” he said. “Even if I get my deposit back, I’ll still be in $15,000 to $20,000 in the red.鈥
KSV declined to comment to the Star and directed questions about the deposits to听Aviva.
A spokesperson for Aviva said it is 鈥渉onouring its obligations under the bond and is working diligently with all relevant parties to ensure that deposits are returned to purchasers promptly.鈥
鈥淭he timeline for returning deposits will vary based on when the purchaser submits their supporting documents,” the spokesperson added.听
In Ontario, the Condominium Act prescribes that the interest on deposits returned to purchasers is calculated at prime less two per cent, the spokesperson said, and this is adjusted twice per year.
鈥淲e appreciate your understanding and patience as we work through this process.鈥
An abandoned project
Metrolinx terminated an agreement with Vandyk to build the transit-oriented community in November 2023, a spokesperson confirmed.听
that were part of the envisioned "Grand Central Mimico" development are also in receivership, on top of the Buckingham site, according to documents on KSV's website.
Rauf is far from the only buyer in this situation.
In addition to the eight cancelled condos, three more 海角社区官网projects, with 338 units, are on hold or in receivership; and six developments, with 1,434 units, are being converted to rentals, since the start of 2024, according to the Urbanation data released in April.
A total of 28 projects and 5,734 units in the GTA and Hamilton region were either cancelled, put on hold or placed in receivership, or converted to rentals.
The Mimico condo was one of four Rauf purchased across southern Ontario, including in Kitchener, where he lives, and the GTA, from late 2020 to May of 2022.听
As for the other Buckingham buyers, Rauf said he鈥檚 in a Facebook group with almost a hundred other people who are in a similar situation waiting for deposits.听
Where buyers can turn听
New condos are covered under听a statutory warranty provided by the Ontario New Home Warranties Plan (ONHWP).听
or something else goes wrong with the project and condo buyers don鈥檛 get their deposits back, they can go to , of up to $20,000.
Andrew Donnachie, director of stakeholder relations with Tarion, said in an email they “sympathize with the purchasers impacted by receiverships like this case.” It demonstrates the important role Tarion plays in protecting consumers,听Donnachie added.听
“Under the statutory warranty, builders are required to refund a new homebuyer鈥檚 deposit if a sale is not completed,” he said.
If deposits are not refunded, “then they can submit a deposit protection claim to Tarion,” he added.听
Still, Rauf wants to warn other would-be buyers to not be swept up in the real estate mania听that motivated him to make the purchase in the first place.
And it’s not the end of the world if they miss out on a sale.
“I guess at the end of the day, the problem is that, yes, the law allows for depositors to get their deposits back if the project is a failure,” he said.
“But the way it is done leaves a lot to be desired.鈥澨
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