The condo project at 7615 Cambie has pre-sale buyers angry over developer?s offer for a release from the contracts
Pre-sale condo buyers at cancelled Langara West project contest developer’s offer
Joanne Lee-Young
The Province
Over a third of pre-sale condo buyers at the cancelled Langara West project in the Cambie Street corridor are challenging the developer’s offer to return their deposits, plus interest and an additional 50 per cent of their downpayment, in exchange for a release.
It is the latest in a Vancouver real estate saga with a bit of everything: a property developer in southern China, a mysteriously felled tree, City Hall defending its permitting process, and land values that have nearly tripled in just under three and a half years.
In an opening salvo, a set of buyers is preparing a so-called position statement for Vancouver-based Vivagrand, according to Timothy Peters at law firm Jenkins Marzban Logan. He has been retained by around 25 of the 71 buyers.
The one-, two- and three-bedroom condos they bought, starting two years ago, were pre-sold from as low as $700 to $900 a square foot in a hot neighbourhood where prices are now going for between $1,200 to $1,400 a square foot.
Many buyers feel they are now priced out of other condos in the area, either for use as homes or investments, given the appreciation in recent years.
The developer ended the project in August, telling buyers that the land — which it bought in March 2014 for $12.5 million — will be sold.
Permitting delays by the City, exacerbated when a tree on the corner of the development was cut down without permission, plus rising costs and the loss of project financing were to blame, according to the developer.
The group of buyers intends to argue there has been a “fundamental breach of contract” that invalidates any “limitation of liability” cited in their purchase and sale contracts. They believe the developer’s offer of the deposit, plus interest and 50 per cent, is based on this clause.
“You can breach a contract in many ways: By delivering the project late, or the condo size may be different,” said Peters. “But the essence of the contract is to deliver a strata lot with common property. If you don’t do that, you are breaching it in a more fundamental way.”
If this is the case, “What is the measure of damages from the developer to the buyers? Is it the difference between what they paid and the current market value at the time of the breach of the contract?” asked Peters.
The group will also turn to consumer protection legislation set out by the province’s Real Estate Development Marketing Act. It regulates the pre-sale of condo units and sets obligations for what developers must disclose, including updates about the strata site and financing, said Peters.
“According to REDMA, a developer can’t misrepresent facts and has an ongoing obligation to amend disclosures” if material facts change, Peters said.
For example, as late as January 2017, the developer told buyers there was a firm commitment by lenders to proceed with the project. “They removed this as a condition,” said Peters.
Eight months later, however, buyers were told in termination letters that delays in the project led to banks walking away from financing the project.
“The important thing is if there were misrepresentations in disclosure statements” as required by REDMA, the developer could be liable to purchasers for damages, Peters said.
“The developer can no longer rely on the limitation of liability as provided in the contract between it and the buyers.”
He adds the buyers “remain hopeful that the developer will appreciate the position they now find themselves in through no fault of their own and understand that the current offer that’s on the table is a fraction of their anticipated losses.”
Vivagrand has offices on West Broadway and describes itself as linked to Guangzhou-based Xiang Li, a real estate firm “with 22 years experience and over 350,000 square feet of residential, mixed-use and infrastructure development in China.”
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