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Vancouver Pre-Sale Condo Homebuyers
Walking Away from Contracts? Hang on… Developers Filing
Lawsuits Against Presale Vancouver Home Buyers for Breach of Contract
For many prospective homebuyers during the past
decade, it seemed like a great deal to purchase a pre-sale Vancouver
condo at ‘basement bargain pricing’ and lock in your
purchase price until the completion of the condo high-rise tower
residences years later. However, with the plummeting global and
local economy and the drop in recent Greater Vancouver housing
prices, many pre-sale condo Vancouver homebuyers are walking away
from their contracts and forfeiting their deposits.
However, there are now six Lower Mainland developers who
are suing and filing lawsuits against these Vancouver pre-sale
condo buyers who are walking away from their deposits, citing
breach of contract, and in many cases, these developers have a
case. With the falling condominium prices throughout Greater Vancouver,
many pre-sale condo buyers are walking away from their original
contracts, as in many cases, these newly completed Vancouver condos
are no longer worth the prices in which they first purchased.
Right now, there are six Vancouver developers who have filed
a combined 74 lawsuits in BC Supreme Court of Vancouver against
pre-sale Vancouver condo buyers. The Developers are claiming breach
of contract for failing to complete their pre-sale Vancouver condo
purchases, with many of these units worth much less than the original
selling prices on the contract. With the downturn in the property
market throughout the region, it is no surprise that many speculative
investors and homebuyers are attempting to back out and walk away
from their original pre-sale condo purchasers. With the fallout
happening quicker and more dramatically than first expected, many
pre-sale Vancouver condo homebuyers either cannot close because
of the lack of cash, or think that they are in a better position
by forfeiting their original deposits than the close on the condos.
And with that, Vancouver Developers are in a tough place where
they gain more unsold inventory in a market that is saturated
and no one is buying.
The Latest Developer Breach of Contract Lawsuits
Against Pre-Sale Vancouver Condo Buyers Forfeiting Deposits and
Walking Away at Completion
Currently, Amacon builders is suing 16 pre-sale home buyers in
the South Surrey real estate community of Morgan Heights that
was recently completed. These South Surrey homebuyers walked away
from their contract and forfeited their original deposits on the
Morgan Heights homes by Amacon, and the developer is now suing
and putting a lawsuit together against these original pre-sale
condo buyers who are breaching their contract to complete on the
units. This will go to the B.C. Supreme Court of Vancouver. In
the case of Morgan Heights South Surrey, only a small percentage
of original pre-sale Surrey condo buyers walked away from their
contracts. These units were already completed and Amacon had already
paid out all the construction labour and materials costs that
were incurred during the height of the Greater Vancouver real
estate market. Therefore, Amacon Developers is set to lose money
if these original pre-sale Vancouver condo buyers walk away from
the recently completed Morgan Heights South Surrey suites. As
noted, pre-sale Vancouver condo buyers who walk away from their
contracts also run the risk of losing their deposits (entirely),
but the same thing happens on the other end. Developers are also
set to lose money if the original homebuyers walk away from their
contracts, as now, they have the carrying costs of unsold inventory
in a down market. The Vancouver Developers can take the original
pre-sale condo homebuyer to court to make sure that the contracts
are enforced, but even if the courts side with them, the clients
are angry and may cause problems in the future, so there is no
win-win situation when there is a breach of contract and Vancouver
condo buyers walk away from their contracts. In addition, the
Onni Group of Companies also has lawsuits pending against 44 pre-sale
Vancouver condo buyers and they are suing these presale homebuyers
for walking away from a handful of recently completed suites across
the Greater Vancouver area.
Vancouver Developers Drop Their Pre-Sale Condo
Prices
Another thing of note is that there is a growing trend among the
Vancouver development industry, that the pre-sale condo prices
are being dropped across all locations. The first major headline
was earlier this year when the Onni Group of Companies decided
to have the largest Vancouver real estate liquidation sales event
for 375 recently completed new units across the Lower Mainland.
The discount for these new Vancouver condos for sale ranged between
25% to 40% off the original listed price, a great savings for
first time homebuyers. Some of these units were originally purchased
by pre-sale Vancouver condo buyers who breached their contracts
and walked away from closing and their deposits. The Onni Group
of Companies MACBULK event sold out every unit within one month.
Also recently, Morningstar Homes Ltd reduced their single family
Burke Mountain homes in Coquitlam by about $100,000 citing construction
costs were lower in this down market. In addition, the Yaletown
Beasley condos in downtown Vancouver, also by Amacon Homes, just
featured headline news that they were dropping all pre-sale Vancouver
condo pricing by 22%. This is for both new purchasers as well
as current pre-sale Vancouver condo buyers, in hopes of trying
to make sure that all pre-build homebuyers close and complete
on their suites come 2012. In addition, it is a way for a Developer
to make sure that there aren’t massive lawsuits if they
reduce only the new condos by substantial amounts. Amacon cites
that the Beasley Yaletown condo discounts are because of lower
materials, construction and labour costs. It must be noted that
these liquidation Vancouver condo sales are not from breach of
contract Vancouver pre-sale condo buyers who have walked away
from their contracts. These are new homes that are still under
construction or pre-construction phases unlike the Amacon and
Onni developments mentioned earlier in this article.
Lawsuits Over Bucked Condo Deals – Original
Pre-Sale Condo Owners in Vancouver Walking Away from Their Contracts
According to MetroNews Vancouver’s Kristen T: A North VAncovuer
ocuple that withdrew from its pre-sale Vancouver condominium contract
is being sued by the property developers in am ove that’s
likely motivated by the economic crisis, the couple’s lawyer
says. John Whyte, who is representing the couple, said that in
a healthier Greater Vancouver real estate market, a vendor likely
wouldn’t “engage in litigation” over a dropped
condo purchase contract. “In a rising real estate market,
if someone chose not to complete a real estate (transaction),
it’s no skin off the vendor’s nose because they know
they can get another buyer,” Whyte said. “But if the
market is going the other way – then they stand the possibility
of suffering a loss. I anticipate that one is going to see a lot
more cases like that.” The dispute arose in December 2007
when the couple put down a adeposit with Amacon real estate developers
for a unit inSurrey’s Morgan heights development. Whyte
said when they later rescinded the deal, Amacon sued them for
the deposit, plus interest and damages. Whyte said according to
the Real eState Development marketing Act, if developers don’t
deliver amendments to disclosure statements – which his
clients claim they never received – the purchaser is no
longer bound by the terms of the contract. AS a result the couple
is counter-suing to have its deposit returned.
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