Buyers of Ontario townhome project still waiting for keys — 6 years after some made deposits

Buyers who put down tens of thousands of dollars in deposits for a pre-construction townhome project in Brampton six years ago are still waiting for their keys as the builder faces both legal and financial challenges associated with the long-delayed project.

Mississauga-based Vandyk Properties is building a townhome community, called the Uptowns project, with 342 units near the intersection of Bovaird Drive East and Highway 427, next to the Turnberry Golf Course. The project first went on the market in 2017. But today, the site remains remains far from complete.

Vandyk says it’s committed to finishing the project within the next two years and that delays are due to a number of factors outside of its control, including the COVID-19 pandemic, labour issues and rising costs. But now some of the developer’s creditors are coming after it in court for failing to make payments and buyers are wondering if they’ll ever get their homes.

Dean Khan, a 61-year old Brampton resident, put down a $60,000 deposit in July 2017 for a one-bedroom unit at a purchase price of $299,990.

Khan said he drives by the project regularly and is frustrated with the lack of progress on construction.

“I always check … what’s going on there and there’s nothing really happening,”Khan said.

“I doubt they would ever be completing it.”

Closing date pushed back multiple times

Khan’s original closing date was December 2020. According to emails shared with CBC Toronto, Vandyk has pushed back the closing date multiple times, citing “unavoidable” delays.

Six years later, Khan’s still waiting. His most recent closing date is October 2024.

“I’m kind of stuck. My deposit is stuck,” he said. “I can’t do anything right now.”

Muthupanti Baskar, another buyer, told CBC Toronto he gave a down payment of $51,000 in May 2018 for a three-bedroom unit at a purchase price of $510,000. He said he planned to move his family of four out of the small, two-bedroom condo in Mississauga where they’re currently living into the larger unit at the expected completion date of December 2020.

But that hasn’t happened yet. At this point, Baskar said he doesn’t believe the project will be completed and wants his deposit back.

“I need to get my down payment as soon as possible so that we can move on with our life,” he said.

Baskar said even if he gets back his deposit, he would be priced out of a market that has seen home prices skyrocket since 2018.

Khan and Baskar are part of an online forum where multiple users who appear to be buyers of the Uptowns project have been chatting with one another and expressing their concerns about the repeatedly delayed project.

Over $200M in charges on property, records show

One of the topics of conversation among those buyers are concerns that Vandyk Properties is in legal and financial trouble.

Approximately $267 million in mortgages and liens have been registered against the property, according to property records accessed by CBC Toronto. However, it’s unclear how much of those funds have been advanced or the amounts outstanding.

The developer is also the subject of at least five lawsuits from sub-contractors claiming they’re owed more than $8 million dollars for unpaid work.

Adding to the concern, a judge at the Superior Court of Justice in Toronto ordered on July 24 a “certificate of pending litigation” be placed over land owned by Vandyk that’s adjacent to the Uptowns project. Vandyk is currently marketing that project — Heartlake Collection at Uptowns — as a separate planned 200-unit townhome development.

A certificate of pending litigation is a court-issued notice registered on a property’s title to inform the public that the property is subject to a court dispute, according to the Canadian Legal Information Institute. It also “has the practical effect of restraining all dealings with that specific property,” according to the institute.

According to court documents, the pending litigation relates to a $25-million loan agreement provided to Vandyk by a lender to help fund the Uptowns project. J. Lang Management claims Vandyk has failed to pay a $6-million fee it’s owed, and is claiming it’s entitled to a mortgage over the Heartlake Collection land in order to secure payment.

In an emailed statement, Domenic Zita, Vandyk’s managing director of operations declined to comment on the certificate of pending litigation, saying it is before the courts. Zita didn’t respond to questions about the sub-contractor lawsuits.

‘Phased completion’ to begin end of 2024: developer

Zita said the developer plans a phased completion for the Uptowns project between the end of 2024 to mid-2025, that the project is financially viable and that the developer is committed to respecting all its purchasers.

“Global circumstances never witnessed before have negatively impacted this project,” said Vita. “[The] Uptowns project has been affected by several factors contributing to its delay including but not limited to COVID-19 impacts on manpower and material shortages, price/cost increases during and since COVID-19, multiple union strikes and an unprecedented 10 interest hikes since early 2022.”

Zita added that delays were also caused by the site’s “geotechnical and hydrogeolical complexity,” requiring “extreme engineering construction means” that forced a productivity slowdown.

Real estate lawyer John Zinati of Zinati Kay Real Estate Lawyers said it has become more common to see projects put on hold, which is reflective of a softening real estate market.

“Builders are paying more for their interest rates on their mortgages. Material costs have gone up. They can’t necessarily collect more from buyers for their projects,” Zinati said.

“We’re seeing projects get into trouble and more and more buyers being stuck in contracts with builders that are not going to be able to complete the property or have excessively delayed the completion of the property and have left buyers in a very difficult predicament.”

Zinati said developers in Ontario are allowed to push back their closing dates when they cite “unavoidable delays.”

Tarion, a consumer protection organization established by the provincial government to administer its home warranty program, defines such delays an “an extraordinary circumstance” where move-in dates must be pushed back “through no fault of the builder or purchaser.” Examples include a strike, fire, explosion, ‘act of God’, civil insurrection, act of war or terrorism or a pandemic.

Still, Zinati said buyers can challenge an unavoidable delay declaration through Tarion or file a lawsuit seeking to get out of the contract and get their deposits back.