Sometimes, it’s just not meant to be.
The Greater Toronto Area’s housing market was a roller coaster in 2019, climbing back from a decade-low sales record set in 2018 and finally adjusting to the federal mortgage stress test. Similarly, Toronto’s pre-construction scene had some wobbly moments too, as a string of projects were stalled, cancelled or revamped across the city.
While it’s uncommon that a new construction project becomes stalled in legal limbo — or outright cancelled — there’s always some risk and Toronto has seen a spate of cancellations over the last few years. Most often, developers cancel projects or get stuck in legal gridlock when they can’t secure financing, planning approval or sell enough units. A stalled or cancelled project is disappointing and frustrating, but new construction buyers do receive some legal protection when it comes to getting their money back.
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Under the Ontario Condominium Act, the vendor is required to refund the purchaser all money received under the purchase agreement, including interest. Vendors are also legally obligated to hold project money in a trust fund, including deposits and upgrade costs. In the case that the vendor becomes unwilling or unable to refund the money to the purchaser, the buyer can reach out to the account trustee (usually a lawyer) and put forward a claim. With projects that are cancelled outright, the legal process can be somewhat straightforward. Stalled projects that are mired in lawsuits or bankruptcy, however, can take years to resolve.
Tarion, a government agency and building industry regulator, also provides protection under the Tarion Addendum — a mandatory part of the pre-construction purchase agreement. This clause requires vendors to issue a refund within 10 days of a contract termination. In hopes of improving transparency and helping buyers make more informed purchasing decisions, as of January 1st, 2020, purchase agreements for new projects and phases are expected to include a Tarion information sheet.
Looking back on the year, there were a handful of condo projects that didn’t get off the ground. Below is a list of all the condo cancellations and the ones who stalled in Toronto during 2019. The cancellations and stalled condo projects were identified by the BuzzBuzzHome research team and reporting primarily from The Globe and Mail.
Developer: Forme Developments
Location: Broadview and Danforth
Previously known as Time Development Group, Forme Developments filed for court protection from its creditors in 2018 under the Companies’ Creditor Arrangement Act and the project went into receivership, along with other developments. According to a notice from Tarion, construction never started on the project. Danforth Square has not officially been cancelled, rather it seems to have stalled.
In January 2018, the developer also cancelled and returned deposits for another condo project, Kennedy Gardens in Scarborough.
On The Danforth
Developer: DIAM Developments
Location: Danforth and Main
In March, buyers received cancellation letters from DIAM Developments stating that its 10-storey project in Toronto’s east end would be stopped due to, “unforeseen circumstances.” The Brampton-based developer referenced in a company statement that increased construction costs, a withdrawn loan from lenders and delays resulted in the project’s cancellation, which was fully sold out. While construction started in June 2017, On The Danforth was never finished — a large excavation hole remains at the dormant site.
The Step Condos
Developer: Terranata Developments
Location: Islington and Finch
Despite being fully sold out, Terranata Developments reportedly put forth a notice of cancellation to Tarion in April, three years after the six-storey project was first announced. It is not known why the developer or builder, Bondfield Construction Company, terminated the project.
The Bean Condominiums
Developer: Royalpark Homes
Location: Dufferin and Eglinton
Four years after launching, The Bean was axed in early 2019. Royalpark Homes initially proposed a 50-unit, five-floor midrise in October 2014, before applying to build an expanded version of the sold-out project in 2017 that would reach 113 units across nine stories. The project has since been relaunched as 8 Haus Boutique Condos, which is said to top out at eight stories.
5959 Yonge Street Condos
Developer: Ghods Builders Inc.
Location: Yonge and Cummer
Units: 555 and 384
While not officially deemed cancelled, construction planning for the two-tower highrise project has stalled and buyers have reportedly been receiving back their deposits. Since its initial planning phases, which started in 2011, 5959 Yonge Street Condos has said to have endured a series of decisions and appeals against the development.
Developer: Haven Developments
Location: Sheppard and Bayview
Cancelling the project in July, developers of the 8-storey condo building put a stop to the project after approval delays. Six25BV began presales more than three years prior to the developments cancellation.
The Academy Condos
Developer: LeMine Investment Group
Location: Ellesmere and Morningside
Targeted at investors as potential rental opportunities for University of Toronto Scarborough students, the stalled 26-storey Scarborough project quickly sold out in 2014. Construction never started on the development before it went into receivership, and was not formally cancelled.
Spice Urban Towns
Developer: Hi-Rise Group
Location: Broadview and Danforth Avenue
During litigation in 2018, Hi-Rise Group executives claimed that they no longer wished to build the townhouse project, and instead switch paths to a rental development. Sales began back in 2014 for the stacked townhome project on Danforth Avenue.