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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.

Lower Mainland and Greater Vancouver condo project cancellations and condominium developments that have been canceled

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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