Millennium Water Condo Development: You may not have to close
June 8, 2010If you are a pre-sale purchaser in the controversial and financially-plagued Millenium Water Condo Development ("Millennium") and are being pressured to close, you might want to consider obtaining an opinion concerning your rights, obligations and options.
Has the project met your expectations? What really happened with the financing and does it affect your obligation to close? Where do things stand with respect to social/subsidized housing in the development?
Was there adequate disclosure?
The development did not proceed as planned for Millennium, the City of Vancouver, or the pre-sale purchasers.
The Real Estate Development Marketing Act (REDMA) provides that anyone who owns, leases or has a right to sell a development is a developer. Since the City still owns the property and the Millennium parent company leased the whole development from the City, it may be that they are “Developers” under the REDMA.
If there was not adequate disclosure, you may have a right of rescission and/or Millennium may not be able to enforce the Contract of Purchase and Sale and require you to close.
Consolidated Disclosure Statement
You ought to have received an original Disclosure Statement and two or more Amended Disclosure Statements, depending on which of the buildings and which stage of the development your unit is in. We can assist you in determining if you received everything you should have. If you did not receive one or more Disclosure Statements, you may not have to complete and can recover your deposit. Similarly, if you only received a Consolidated Disclosure Statement when you signed up, you may not have to complete.
Misrepresentations
Did the representations made by the developer to you personally turn out to be true? What were you told about the development/your unit?
What did you understand, if anything, about units being set aside for social/subsidized housing? What were you told about parks, green space, adjacent developments?
Depending on the representations made to you, and your reliance on them, you may not have to complete the sale.
What do pre-sale purchasers have at risk?
Your deposit remains in trust and cannot be released to the developer without your consent or a Court Order. If you do not complete, the developer/the City will sell your unit and seek the difference from you, which could be significantly more than your deposit. Put another way, the amount you have at risk is the difference between your purchase price and the price for which the unit is ultimately sold. The developer can also claim interest from the closing date, strata fees to the date of the sale, real estate commissions, legal fees and Court costs.
Harper Grey LLP can help minimize your loss, even if the developer is entitled to claim damages from you for failing to complete.
The closing date moved up?
The developer intends to close sooner than anticipated and sooner than provided for in the Disclosure Statements. This could create huge problems for purchasers who have organized their finances to close several months down the road. It remains to be seen whether or not the developer will do this.
Sale of the remaining units
The Millennium has released more units for sale. If you plan to sell your unit shortly after closing, you may well be selling into a falling market in competition with the developer’s marketing machine. If you are considering completing on the purchase and immediately selling your unit, do not forget that you have to pay GST and property purchase tax on closing. Also, factor in carrying costs, real estate commission, and strata title fees which will not be recoverable when you resell your unit.
More than one pre-sale purchaser has expressed concern to us that Millennium/the City may have no alternative but to rent unsold units. In any event, it appears that many of the units have been, or will be acquired as an investment, with the intention that the unit be rented for the foreseeable future. If that turns out to be the case, do you want to own/live in a development where the Strata Corporation is controlled by the developer/investors, as opposed to owners who live in their units?
How can Harper Grey LLP help?
We are familiar with the development and the documentation produced by the developer, including the Contract of Purchase and Sale, the Consolidated Disclosure Statements, the various Amended Disclosure Statements and the Disclosure Statement, as we have advised several pre-sale purchasers of their rights, obligations and options.
We have a dedicated group of four lawyers, headed by Bryan G. Baynham, QC, who act for pre-sale purchasers. Over the last year and a half, we have represented over 130 pre-sale purchasers and provided opinions on more than 30 projects. We have achieved considerable success by aggressively asserting our clients’ rights and, in many cases, have been successful in obtaining the return of some or all of their deposits. We know the development and we are knowledgeable in this area of the law. We can quickly provide cost effective advice, because we do not have to reinvent the wheel.
If you want to make an informed decision about whether or not to complete your pre-sale purchase at Millennium Water, contact Bryan G. Baynham, QC at 604 895 2802 or via email .
