A Vancouver-area developer has recently terminated its presale condominium contracts with dozens of buyers a few months before the scheduled completion date of the project.
According to a letter sent to the buyers, Anderson Square Holdings Ltd., the developer of the 15-storey mixed-use residential tower in Richmond, B.C., is ceasing the deal because of a continuing lawsuit and the difficulty of securing financing.
Although the developer promised a refund of deposits and interest, the sudden dropout sparked anger and frustration among about 40 buyers, many of whom have been waiting for four years for the project, named ALFA, to complete.
“It was definitely sad seeing it, and also feeling unjustified because we don’t have any other explanation from [them],” said first-time home buyer Samuel Chang, who purchased a two-bedroom presale condominium in 2015 and made a $50,000 deposit.
Mr. Chang said he couldn’t understand why the developer is cancelling the contracts because the construction continues.
“There is definitely no communication, no further explanation on their side,” he said. “Especially when we found out [the project is] still under construction and I feel like it’s really unacceptable.”
Calls and e-mails to Anderson and its director, Sunny Ho, who is also a former Richmond city council candidate, were not answered.
Darin Hughes, president of Scott Construction Ltd., who is responsible for building the ALFA tower, said the company hasn’t been advised by Anderson to end the project.
The project initially was supposed to finish in 2018. However, Mr. Chang said he received an amendment from the developer that extended the completion date to the fall of 2019, owing to delays.
In the notice of termination, the developer said the company is “facing serious and significant circumstances beyond our reasonable control.” Those circumstances include Scott Construction’s lawsuit against Anderson, it said.
The construction company filed a claim with the B.C. Supreme Court last November, asking the developer to pay $4.65-million in extra costs because of delays allegedly caused by Anderson. The costs, according to court documents, include salaries, labour costs, and additional site and head office overhead.
However, in the response to the claim, the developer denied the allegations, and instead accused Scott Construction of causing the delay for its selection of a window provider, which failed to obtain an essential insurance.
In a statement from Scott Construction, the company says Anderson has not acknowledged it is the cause of the delay. “These costs are a direct result of delays by Anderson because they had not filed for building and other permits in timely manner,” the statement reads. “We deny that we are responsible for the delays as alleged by Anderson.”
Anderson’s lawyer, William E. Knutson, didn’t respond to an interview request.
Jeremy Hsu, a Vancouver-area realtor and a buyer in the ALFA development, said some buyers will meet this Friday to discuss possible solutions, and many have been seeking legal counsel.
“We really just want the completion of the building," he said. “... Many of us purchased the condominiums for ourselves to live in or for retirement.”
Mr. Chang said he hopes the termination can be cancelled.
Richmond-Queensborough MLA Jas Johal met with Mr. Hsu this week. He said the case is concerning and the city, as well as the province, need an entire regulatory review of the presale market.
“Municipal and provincial [governments] should look at all avenues in where they can help these people,” he said. “I think it’s a reminder that we need a thorough review of entire presale market and how it’s regulated. Because right now, there’s a patchwork of regulations.”
Andy Yan, urban planner and director of The City Program at Simon Fraser University, said similar cases in presale market are still quite rare.
He added although it’s unfortunate for the buyers who expected to move in to their units, the developer, who promised to return deposits and interest, is fulfilling its contractual obligations.
As the housing market in British Columbia is cooling down, Mr. Yan said, what Anderson has done might be doing some buyers “a favour."
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Xiao Xu