A sold-out high-rise condominium project that promised to deliver units to the new Vaughan Metropolitan Centre is the latest in a string of cancelled condo projects, leaving more than 1,100 hopeful buyers in limbo.
Cosmos Condominiums was announced by Liberty Development Corporation in 2013, began pre-selling condo contracts in 2016 and was supposed to start delivering units in 2019. This week, buyers received letters from Liberty saying the project was “challenged” by “unsatisfactory financing terms” and cited early cancellation language in the contracts and said it would return buyer’s deposits.
At the time of its pre-sale offering period, Liberty sold 780 units in the first two towers in 25 days, according to real estate analysts at Altus Group. The project was later described as “sold out” of its 1,153 units on the company’s web pages, which have since been taken down.
Still, it represents a tiny fraction of the total development plans in the region: at least 600 new residential projects are in various selling and planning stages across the GTA.
“We have recently learned that because of circumstances beyond our control and Liberty’s best intention, our project, Cosmos Condominiums, has been challenged,” reads the letter, signed by Liberty director of sales and marketing Shawn Richardson. “At this time, financing for the project on terms satisfactory to the Vendor cannot be arranged … It will force the project vendor to now cancel all Agreements of Purchase and Sale.”
The “vendor” in this case is the owner of the land, which is a numbered company: 1945086 Ontario Inc. Liberty spokespeople would not confirm the owner of 1945086 Ontario Inc., but the company is registered at the same 1 Steelcase Rd. address as Liberty Development Corp. and lists Feyedoon (Fred) Darvish as its president. Mr. Darvish is also the president and founder of Liberty.
Mr. Richardson, Mr. Darvish and CEO Latif Fazel did not respond to interview requests. In a statement, the company repeated its explanation from buyer’s letters.
The company didn’t explain what went wrong with the financing, but conditions for builders have changed significantly in the last 24 months.
When Cosmos launched in 2016, it was selling units for about $540 per square foot,according to Urbanation. More recent projects launched in Vaughan were able to fetch more than $700 per square foot, close to a 30-per-cent increase.
Construction costs have also been rising rapidly in the last 18 months, particularly among critical concrete-forming and window suppliers in the region, who are charging 30 to 50 per cent more than they were asking in 2016.
The buildings were to be erected on the corner of Highway 7 and Maplecrete Road, and units were priced between the mid-$200,000s and just under a million dollars.
“When my clients received this shocking news in the mail from builder they got heart broken, because this builder has their deposit and they didn’t invest in any other projects that launched in this area after Cosmos condos. They all planned out to move there in few short years in their first home. The dream that didn’t come true for them at this time. It literally kicked them out of the market due to higher condo prices and they will remain as rental tenant.”
Source: The Globe and Mail Inc., + nasim yusufi