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September 28, 2018

More protections needed for pre-construction homebuyers, says Ontario’s warranty program CEO

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The CEO of Ontario’s home warranty program says the recent cancellation of two condo developments in Vaughan suggests it is time the province looks at upgrading protections and transparency for pre-construction homebuyers, including flags on Tarion’s own website that would alert consumers to builders who have cancelled projects.

Howard Bogach said the building industry’s reputation has taken a hit in light of two cancellations involving more than 2,600 condos at the Vaughan Metropolitan Centre, and he warned more condo cancellations could be coming.

“We’ve looked at a series of projects that have been sold for three years where construction hasn’t begun yet,” he said.

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That doesn’t mean they won’t be built, but, “I would say these are the vulnerable ones.”

Bogach did not specify the number or the location of those projects. But he advised buyers in those circumstances to contact their builders. If the developer doesn’t respond, Bogach urged consumers to call Tarion directly.

Last week, buyers in the Icona development sold by Gupta Group/Easton’s Group of Hotels received cancellation notices. In April, Liberty Development cancelled its Cosmos towers along the same stretch of Highway 7 near Jane St.

Both companies cited non-specific financial reasons for killing the projects. Apart from letters to their buyers, neither firm has commented on the decision to kill their projects or the disappointment of buyers, who had their deposits tied up for one and two years, respectively, as home prices continued to rise in the GTA.

Although he cautioned against knee-jerk responses, Bogach told the Star on Wednesday that the industry, governments and developers should look at whether the notifications and disclosures on new home projects “could be improved from what we’ve learned in these two instances.”

“Are there more steps we could take,” he said.

A Star investigation published online Thursday revealed that the LeMine Investment Group has failed to break ground on 339 condo units it sold in 2014 at The Academy at 3070 Ellesmere Rd. in Scarborough and another 410 units sold two and a half years ago at Central Park Ajax, a project mired in legal turmoil.

Tarion, which has a builder regulatory function and also considers itself a consumer protection agency, advises buyers to do their research before purchasing a home. But Bogach admitted that while Tarion’s own online builder directory shows whether a builder is registered in Ontario and whether there have been issues addressed by the warranty program, it does not alert consumers to builders who have cancelled projects.

Keep reading in The Star

 


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