Some Ottawa homebuyers say a developer has left their lives and their finances hanging by failing to finish — or in some cases, even start — building pre-purchased townhomes that were supposed to be move-in ready before the COVID-19 pandemic.
CBC News has seen the purchase agreements of five individuals who bought homes in a new development called Fresh Towns on Baseline Road in the city's west end. The builder, Greatwise Developments Corporation, is headquartered in Toronto.
The pre-construction contracts were all signed between 2017 and 2019 for homes priced between $344,000 and $465,000 and scheduled to be completed by early 2020.
But according to the buyers, the townhomes aren't ready. Four said construction hasn't even begun.
"I'm devastated. I'm frustrated," said one buyer who has waited more than five years.
Complainants said they've not heard from the company in months, and have no update on the status of their homes.
In some cases, the developer has offered to return deposits, but the homebuyers have refused, believing they deserve additional compensation. Some also suspect Greatwise of wanting to flip the properties for greater profit — a claim the company refutes.
Three homebuyers agreed to share their stories in detail. CBC has agreed to withhold their identities because they fear speaking publicly will give the developer cause to terminate their contracts, which stipulate the vendor may axe the deal in the event of a dispute.
At least one client has filed a consumer complaint to the Home Construction Regulatory Authority, which oversees home builders and vendors in Ontario. The issue was even brought before the Ontario Legislature earlier this month during question period, with no clear resolution.
In a letter emailed to CBC, the company said the last several years have been "extremely difficult."
Greatwise said its business has been severely hampered by the pandemic and "while the emergency may have faded from the public's view, its effects continue to be very real, with impacts across all areas."
Eight of the 15 planned blocks of townhomes have been completed and delivered to buyers, it said.
"We are hopeful that conditions will continue to improve and enable us to proceed with the remaining blocks," the company wrote, adding it must now proceed "incrementally."
The purchase
One homebuyer — CBC is calling him Alex — said he placed a $60,000 down payment on a two-bed, two-bath townhouse worth about $370,000 at Fresh Towns in the spring of 2019. His initial closing date was scheduled for February 2020.
Alex had recently moved to Ottawa, and said the property was within both his price range and desired neighborhood.
"I was excited. It was brand new," Alex said. "A freehold within the Greenbelt is great to have."
Another buyer, John, said he and his relatives wanted to move closer to each other so they purchased multiple properties from the developer in 2018, each worth more than $340,000.
John said he made more than $100,000 in down payments for the homes, which were due to be completed by 2020.
A third homebuyer, James, pre-purchased a $354,000 townhouse in the fall of 2018 and hoped to move in by 2020. He and his wife had just had their first child and this was to be the family's first home.
"It just had kind of everything that we were looking for in a home. Plus it was new, so I mean it looked all good from the start," James said.
Delays begin
James, who lived near the building site, would regularly drive by to check on his home's progress in the months following his purchase. He said it quickly became clear construction was behind schedule.
The developer issued several notices of delay, which CBC has seen, leading up to March 2020. According to one early letter from the Fresh Towns sales team, moving dates needed to be rescheduled because of "some unanticipated directives from the City of Ottawa that caused unforeseen delays beyond our control."
Alex said he wasn't worried at first. The homebuyers' contracts accounted for delays and limited the number of times the developer could move closing dates.
According to the fine print, those restrictions would have pegged the closing date for most clients to mid-2021 at the latest, barring any "unavoidable delay."
When the pandemic was declared in March 2020, however, homebuyers were told closing dates were delayed indefinitely.
"It is difficult at this stage to be certain if or how long the total delays may be and thus how the construction schedule for your home will be affected," read a letter delivered that month.
"We [were] kind of just left in the dark by that point," said James.
Delays continue
Subsequent updates from the company continued to blame the pandemic for the delays.
"Some of our finishing material is not arriving on site on the dates previously committed by suppliers," one letter dated October 2020 read. "With the second wave of the pandemic, we anticipate there may be even more impacts to the schedule."
Letters sent in April, May and October the following year pointed to "extremely difficult" supply chain issues.
Another letter sent in June 2022 said building permits for the project had still "not yet been issued by the city due to the delays caused by the COVID-19 pandemic."
Homebuyers said that was the last official correspondence from Greatwise.
Asked by CBC to clarify the reason for the holdup, the city's department of planning services said the developer hasn't filed all the required documentation to issue building permits — specifically, plans to ensure city services and stormwater management wouldn't be disrupted during construction.
In its response to CBC, Greatwise said "site servicing has not started" on the final three blocks of townhomes. It said the same contractor responsible for the previous phases of construction will file the documents.
"We knew there was going to be some sort of delay and we were expecting it to take, I don't know, quite a while," said James. "But five years isn't what I was expecting."
An offer turned down
As time dragged on, some homebuyers said they felt the developer was encouraging them to walk away from their purchases.
"Any other correspondence we had with them, they wouldn't fail to suggest to homebuyers, 'You know, you can have your money back if you want,'" said Alex.
The homebuyers told CBC they suspect the developer wants to resell the properties at a higher price.
In April, Greatwise Developments advertised some of the pre-construction homes within the Fresh Towns development for sale, after having announced previously that the units were sold out in 2020.
The prices of those homes are not publicly listed, but MLS listings dating back to 2019 show at least five other completed homes in the Fresh Towns development were sold for approximately $480,000 to $675,000 — significantly higher than the pre-construction prices listed on the contracts shown to CBC.
Those homebuyers feel they deserve to be reimbursed for a portion of the increased market value should they accept their deposits back. Mortgage rates have also crept up since they first signed their contracts.
"Considering the amount of time that we've been waiting and how the economy has kind of shifted, having our deposit back isn't really going to help us out at all," said James.
Greatwise disputes allegations that it's trying to flip the delayed homes, pointing to its record of selling and delivering units at their original prices.
The company maintains it only re-lists a home after a purchase agreement falls through.
No help, say homebuyers
Numerous attempts to escalate their complaints have failed, some homebuyers said, leaving them feeling helpless.
Alex filed a complaint to the Home Construction Regulatory Authority (HCRA) two years ago, but said there's been a lack of communication from the regulator since then.
"The HCRA takes all complaints seriously and is aware of the issue, and an investigation is underway," according to a statement from the HCRA, adding it doesn't comment on current investigations.
Generally, "project delays are common and do occur, however delays with no reasonable justification could be considered a breach of contract," the HCRA said.
Calls for the provincial government to get involved have also gone unanswered, said Alex.
In a statement to CBC, a spokesperson for the minister of Public and Business Service Delivery said "government has zero tolerance for any bad developers making money off the backs of hard-working Ontarians.
"The disciplinary actions the HCRA can now take against unethical developers include the ability to revoke a builder's licence and the use of administrative penalties upwards of hundreds of thousands of dollars."
The ministry said it could not comment further while the HCRA investigates complaints made against Greatwise.
Fresh Towns responds
CBC asked for an interview with the Fresh Towns client care team, which responded with two letters.
"We understand and empathize with some purchasers' frustrations about the timelines, and we share their frustration and desire to get these units delivered. Unfortunately, it's not as easy as wishing it to come true," read one.
The developer said it's operating within the parameters of its contracts with homebuyers, and through procedures set by Tarion, a consumer protection organization established by the province.
Those include an "unavoidable delay" procedure allowing developers to extend closing dates for as long as there are "direct impacts of the pandemic itself upon the time for delivery of the home," according to Tarion.
Fresh Towns hasn't yet met the conditions "for exiting unavoidable delay in respect of all the blocks in the project," the client care team told CBC.
The team said it has been in regular contact with customers and responds to all requests for information.
Lives on hold
Alex, John and James said more needs to be done to protect homebuyers who are out tens of thousands of dollars and are still nowhere close to moving into the homes they committed to buying five years ago.
Alex said the last few years have been "a nightmare." He decided to buy another house but it took about 200 viewings and 50 offers before he found one at a much higher price.
"I'm devastated. I'm frustrated," he said. "I'm surprised that in what you consider a first world country, this is allowed to happen."
John said the situation forced his family to consider living elsewhere.
James's family moved in with his parents while waiting for their home, storing furniture there for years. They eventually moved across the country because of work.
"That was also tough because I have this down payment into this property, but now I have to look somewhere else. So it's just tough financially and in a bunch of other ways, to be honest," he said.
Ottawa Morning9:13Frustrated homebuyers still waiting for the keys, 5 years later
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2023-06-19 12:52:42Z
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