Another day, another condo cancellation.
A 10-storey residential building on Danforth Ave. has been scrapped by DIAM Developments “due to unforeseen circumstances outside of DIAM’s control,” the Toronto Star reports. The On the Danforth project sold all of its 135 units nearly three years ago, and on Tuesday, buyers received a letter informing them that their deposits would be refunded.
READ: Toronto Storeys’ Housing Issue of 2018: Condo Cancellations
In a statement, DIAM noted that unexpected construction delays, cost increases and a construction loan disagreement all contributed to the building’s cancellation.
“As a result, the project is no longer financially viable,” their statement read.
The Danforth condo’s original occupancy date was set for November 2017. However, the date was continuously pushed back, first to August 2018 then to April 2019, before it was officially cancelled this week, condo buyer Dave Wright told The Star.
DIAM is known for building custom homes, but also has a project called Radiance in the works. Radiance is an Innisfil, Ont., townhouse development, which is expected to be finished this summer. A spokesperson for the Brampton-based developer told The Star that On The Danforth’s cancellation won’t affect its other projects.
READ: Ask An Agent: What Happens If My Pre-Construction Condo Is Cancelled?
Condo cancellations are nothing new for Toronto. In 2018, more than 4,000 units were terminated, according to condo analytics firm Urbanation Inc. The units were from 12 buildings across nine developments.
This number is huge compared to the measly 1,678 cancelled units in 2017, and the 379 cancelled units in 2016.
What To Know About Buying Pre-Construction Condos
Builders will always have an escape clause in the agreement of purchase and sale. This allows them to get out of the contract due to unforeseen circumstances if they pay back the investor’s deposit.
“Some builders may return your money with interest,” Steve Jelenic of Chestnut Park Real Estate Ltd. and Christie’s International previously told Toronto Storeys. “Alternatively, you may end up with an option to join a class-action lawsuit with other buyers.”
READ: Condo Cancellations Risk Crisis Of Confidence In Toronto Real Estate
Consumers should always vet a pre-construction project before purchasing, Jelenic warns. This includes considering factors such as the developer’s reputation, the type of building, location and so on.
Visit here for more advice on buying pre-construction condos.
