The problem of developers carrying too much completed unsold inventory is not only being seen in the condo market.
A townhouse project in Toronto was recently placed under creditor protection, according to filings in Ontario Superior Court.
At 1648 Victoria Park Avenue in North York, a few blocks away from the Eglinton Square Shopping Centre, Toronto-based developer Solotex Group has constructed a 147-unit townhouse project called The Vic Towns. The project website describes the units as “move-in ready.”
The project is held under 1682 Victoria Park Avenue Inc. and the application to place the project under creditor protection was filed on July 14, 2026 by Findev Lending Inc., a Toronto-based real estate non-bank lender who noted in its application that 65 of the 147 units — 44.2% — remain unsold.
“As a result of the significant downturn in the real estate market in Toronto, the Debtor has been unable to sell the Units and generate the revenue necessary to meet its obligations as they fall due,” said Findev.
On its corporate website, Findev identifies Toronto-based developer Plazacorp as a significant shareholder and said that “Findev in conjunction with Plazacorp can enable other construction lenders to close their risk gap on projects that commence or evolve into at-risk projects by providing subordinated capital and project execution oversight.”
Findev says the project was having financial issues since at least January 2025 and that those issues required Plazacorp to loan an additional $7,246,688.00 to complete the project, “fix deficiencies in the 82 sold townhouses,” rectify Tarion-related warranty claims, complete outstanding finishings in the unsold units, and pay property taxes.
“Without the Applicant’s involvement and additional funding being advanced, the Debtor would not have closed the 82 sold townhouses,” said Findev.
The Vic Towns project at 1682 Victoria Park Avenue Inc. (Solotex Group)
Creditor Protection
Findev is only the fourth-ranking charge holder, however. Findev did not outline the events leading up Solotex defaulting, but said they issued Solotex a formal demand for payment on June 12, 2026 and are owed $24,347,706.00 as of June 30.
Windsor Family Credit Union (WFCU) is owed $24,328,081.23 as the first-ranking charge holder, Firm Capital (TSX: FC) is owed $9,000,000.00 as the second-ranking charge holder, Westmount Guarantee Services is owed $1,000,000.00 as the third-ranking charge holder, and Yonge-Abell Mortgage Partners Limited is owed $17,000,000.00 as the fifth-ranking charge holder.
All five charges total to $75,675,787.20 owed as of June 30, and Findev notes that Solotex also owes the Canada Revenue Agency $5,524,569.88 for unremitted HST.
Findev also noted that some of the outstanding debt has already been reduced using the revenue from the sale of the 82 units, but: “There has not been a closing since March of 2026 and the Debtor has 65 unsold Units that must be disposed of.”
Findev’s creditor protection application was granted by the Ontario Superior Court on July 17, noting that Solotex was not in a financial position to apply for creditor protection themselves — as is often with such proceedings — and that they decided to file the application because Findev “stands to suffer a significant shortfall in excess of $10,000,000.00 on the indebtedness owed.”
What Happens Next
The unsold units will now go through a court-ordered sales process, with Findev submitting a stalking horse bid that undergirds the process. A stalking horse bid is a purchase offer that serves as a default bid in a sales process and is contingent on no better offers being received.
Findev has indicated that it plans to attempt a bulk sale of the remaining 65 units — as opposed to selling the units individually, as some have done in this position.
Findev has also indicated that if no better offer is found and their stalking horse bid is selected, they have “sufficient financing” to payout the debts owed to the three preceding charge holders — WFCU, Firm Capital, and Westmount.
Numerous lenders that hold a non-first-ranking charge on an insolvent project have been semi-forced to make credit bids like this in order to preserve their positions, as an alternate offer could very likely result in a shortfall given current market conditions.
Findev says it would seek to complete their purchase via a reverse vesting order — a share sale — that essentially removes some of the existing liabilities and bypasses the land transfer tax.
Exact details of the sales process will be outlined in a future court application.
