The Friday Rant: “Dear Valued Condo Buyer”

Corporate Concepts

The following is a completely fictional, highly biased, albeit realistic view of what condominium developers in Toronto can, AND, do, get away with…

Dear Mr. Flemmming,

First, let us say that despite having held your deposit for several years, despite having sent you dozens of letters, and despite having received your requests for correct spelling of your last name, we still are unable and/or unwilling to change it at this time.

We regret, and/or, subject to change, would like to inform you of the following changes to your unit, which may, or may not, or might, or will not, be described legally or otherwise.

We originally contracted to complete your condominium unit by November 1st of 2012, however we have absolutely no intention of honoring that date, for the following reasons:

a) We never intended to.
b) That date was set ridiculously and unrealistically soon, so that we could lure in unsuspecting, naive, first-time-buyers
c) We don’t have to honour that date.
d) We can do whatever we want.  Seriously, read a goddam newspaper!

We are going to send you a letter every three months whereby we extend the “Economic Viability Date” by another 3-5 months, until we feel like breaking ground.  We will probably settle on December 15th, 2013, but that’s before we extend it to March 1st, 2014, then July 15th, 2014, and then finally settling on October 21st, 2014, before changing it yet again.

After you take occupancy, our salespeople will promise that we will be registered as a Condominium Corporation within “a couple of months,” but it will likely take 8-10 months.  There is an outside shot, however, that we deliberately delay registration for a period of upwards of 24 months so that we can avoid you and 60 other people selling their units on the resale market, and competing with the three other projects we are currently building.

As for you own individual unit, please let this one letter, which may be sent to the wrong address, serve as notice to all of the following:

First and foremost, we are lowering the ceiling height from 10-feet to 8-feet, and we do not believe this constitutes a “material change” as per your Agreement of Purchase & Sale, therefore you have no legal remedy in this case.  Since we are unwilling to sign a mutual release, and/or provide any sort of remuneration, we believe that if you do not abide by this change, we will sue you for breach of contract.

Secondly, you had better put away your swim goggles, because we have decided not to build the rooftop pool in the building.  Basically, it’s going to cost us too much money, and while we sold you the unit on the basis of the rooftop pool with a waterfall and a TON of hot chicks tanning in bikinis, we have decided to buy fur coats for the CEO’s of our companies instead, and give you a bucket of luke-warm water in place of the pool.  Please accept this bucket, or we will sue you for breach of contract.

Now, we should also explain that during the process of building this condo, we will have to change a few things around.  It’s like buying a ton of groceries, and then getting home and realizing that you can’t fit everything in your condo.

On the original floor plan that we showed you in the sales centre, on that beautiful summer day, when the super-hot sales girl gently twirled her hair and laughed at all your lame jokes, the HVAC system was tucked neatly into the corner of the living/dining room, and made furniture placement rather easy.  Well, as luck would have it, we had to re-route some of the systems in the building, and, well, your HVAC system landed smack-dab in the middle of the room!  Now, you’ll have no way to place your dining room table, couch, TV, and basically anything else you own.  Please see below:

This diagram, that our intern just made in Paint on his iPad (bought with funds saved by not building the party room either…), shows that while the HVAC was previously in one place – on the diagram, in the package that you signed when contracting to purchase this unit, is now in the middle of the room.

Your lawyer will likely have to play the role of the parent telling the child that there is no Santa Claus, but for now, let’s just say that you have no legal recourse in this matter.  Your 200-page agreement used verbiage to cover situations exactly like this.  “Subject to change” is, perhaps, our favorite.

In your Agreement, it was specified that your concrete floors would be “polished concrete,” however we did not specify the type of polish, or really anything beyond the exceptionally vague “polished concrete.”  Therefore, the sleek, epoxy finish that you’re accustomed to seeing in really nice condos (not to mention our floor model unit in the sales centre) will not be present, and a very cheap, awful finish will be used in its place.

Additionally, while we’re talking about flooring, the floors themselves will be so uneven that if you ever do decide to install hardwood, you’re going to have a difficult time doing so.  You’ll likely get dips in the flooring within a day or two, but nowhere in your contract did it say anything about the quality of workmanship when it comes to the concrete in the building.  Tradespeople are expensive, so we just got a friend of the homeless guy down the street to operate the ready-mix truck.

Now, since we didn’t extend the free-standing walls in your condominium up to the ceilings, you’ll notice you have the ability to climb up on the kitchen counter and peek over to look in between the walls.  Yes, we did stuff construction garbage in between the walls, but honestly, we only did this because we thought you’d never notice.  There’s at least a dozen beer bottles down there, which are worth $1.20 if you return them at the beer store, so in actual fact – we are doing you a favour!  There’s also some old drywall, pieces of 2×4, sheet metal, the odd brick or two, and whatever else you can find, because believe us – it’s there!  There was nothing in your Agreement to prohibit us from doing this, so please leave it alone.

If you have been thumbing through the old brochure for the project, you may notice some changes from the glossy, thick pages made with extra chemicals to produce that “new book smell” that gets everybody high and as a result, excited to buy crappy real estate.

First of all, the photo of the lobby does not resemble reality.  In that lobby, there is a concierge, which we will not have because it is too expensive, and there are things like floors, walls, ceilings, lights, and a host of other items that will not be completed until 12-14 months after we first give you the keys to your unit.

Secondly, the brochure shows Mercedes and Jaguars pulling up outside the building, but no self-respecting person with that kind of bling would ever be seen outside this awful condominium that we are creating.

Lastly, you’ll notice that in the brochure, the exterior of the building is made of classy red brick, but in reality, we are going to use cheap poured concrete which we will pour too quickly and then use a rusty crowbar to strip off the forms in a hurry, so it won’t look very good.  No worries though – you have no legal recourse over anything but your individual unit (and as we’ve detailed above, we can basically do whatever we want there as well), so you needn’t waste time chasing ghosts here.

As for your Tarion warranty, we thank you for completing the pre-delivery inspection.  We are going camping this weekend and we need something to start our campfire with, so we’re going to use the 200+ Tarion warranties, which aren’t worth the paper they’re printed on.  We noticed that you identified about forty “deficiencies” on that inspection, however we really only feel like correcting three of them, so that’s all we’re going to do.  It’s up to you to jump through hoops to try in vain to get the other items remedied.

Now as you are well aware, your unit is on the 8th floor, but there are some subtle differences between what was promised/intended/lied-to and what we’re actually going to deliver.  In the scale-model of the building, and in all the drawings, the 8th floor looked as if it were high up enough to clear the building next door, giving you a nice view of the downtown core.  But in reality, the building next door is 9-storeys.  You see, we simply drew an 8-storey building to look as if it were two storeys higher than a 9-storey building, and to our surprise – it worked!  Nobody caught on!  Sometimes, we even surprise ourselves.  Anyways, the point is – you will be staring directly into the glass wall of the building next door.

In conclusion, Mr. Valued Condo Buyer, we would like to continue our mutually beneficial relationship and we would very much appreciate it if you would continue to play along with our games, and never object, and if you did object, it would 99% likely be through a lawyer with no influence whatsoever, so we could ignore you and your lawyer, and continue business as usual.

BUY NOW!

BUY PRE CONSTRUCTION!

ACT FAST!  ONLY 5% DOWN!

Doesn’t that sound like a “deal?”

Or are you weary of “deals” in this market?  And have you read far, far too many bad things about today’s pre-construction condominium developers?

26 Comments

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  1. magnificent points altogether, you simply received a brand new reader.
    What may you suggest in regards to your put up that you simply made some
    days ago? Any certain?

  2. Nalliah Thayabharan says:

    New Condominium units in Toronto have shrunk in size overall; they’ve gone down by 100 sq ft over the last 5 years on average. We will have to see the impact in the rental market when all the towers now under construction in Toronto hit the market.
    The average size of a new condominium unit in Toronto is 650 sq ft and based on average price, it will cost about $330,000. With rental rates on average $2.20 /sq ft, investors may expect monthly rent about $1,450.
    But will that rent cover the costs for the investor? With 20% down, a $264,000 mortgage at 3% amortized over 25 years, the principal and interest costs would be close to $1,250/month. Monthly condominium fees are about $0.50/sq ft per month on average and property taxes are about 1% of home value. When utilities are added the cash flow becomes negative.
    The condominium market in Toronto, the biggest of its kind in North America for that class of housing, is largely based on a capital appreciation. Most investors finance their condominium units knowing that they will be unable to carry them on a cash-flow positive basis based on present rental rates. The condominium game continues to be about capital appreciation and very small return would shrink the pool of investors.

  3. Brandon says:

    old waterfront condo that was built in the late 80s. So much for pride of workmanship.

    I bought a new construction home once. Would never do it again, and refused to sign my PDI until everything was done. That got them moving their asses. Still, never again.

    Tarion is a joke. As long as the building stays upright for 2 years, the builder is in the clear. Even the people that take calls from frustrated new home buyers agree that more teeth are needed to protect home buyers.

    Replyvideo pool

  4. JC says:

    Not necessarily restricted to condos either. I used to work for a builder of residential homes and quit shortly thereafter, after seeing much of what you described above. The one thing you didn’t mention was workmen taking a dump in someones’ basement before closing. Wouldn’t have been so bad if they’d actually used a toilet.

    And the garbage being thrown into walls in condos is nothing new. In 2005, I found pop cans, empty caulking tubes (though I don’t know where they actually used any caulk), pieces of drywall, etc in my old waterfront condo that was built in the late 80s. So much for pride of workmanship.

    I bought a new construction home once. Would never do it again, and refused to sign my PDI until everything was done. That got them moving their asses. Still, never again.

    Tarion is a joke. As long as the building stays upright for 2 years, the builder is in the clear. Even the people that take calls from frustrated new home buyers agree that more teeth are needed to protect home buyers.

    1. moonbeam! says:

      David — please do a post about Tarion and the PDI nonsense. It is a scandal that new home owners are falsely reassured that they are protected & that there is any kind of warranty on their newly built property. Please expose them!!

  5. Tina says:

    I LOVE IT!!!!!

  6. IanC says:

    This is such a great article. So funny without even stretching the truth!

  7. Chuck says:

    one of your Top 5 of all time.

  8. Jon bravo says:

    I—LOVE—THIS—ARTICLE!

  9. Alex says:

    lol, sounds like 150 Sudbury St to me, just sayin-)))

    1. lui says:

      LOL David holds a grudge for a long long time…Urbancrap at its best….

      1. @ lui

        A lot of readers believe this is about my experience with Urbancorp, but it’s not just that.

        This stuff goes on everywhere in the industry, and as “JC” just pointed out, it goes on with houses as well.

        I’m just trying to show people what they’re getting themselves into with pre-construction. That’s not to say that there isn’t garbage in between the walls of your 3-year-old condo, but you won’t go through four years of anguish when you purchase resale. What goes on in this city with condominium developers is criminal, and it’s downright cruel. Consider the first-time-buyers who were stuck in occupancy for 18-24 months, paying $1000 – $1500. That’s financially crippling to them, but there’s nothing they can do.

        I could have given a dozen more examples in my article, but I actually read it over and said to myself, “Enough is enough.”

  10. Vlad says:

    @Paully
    KY is not applied since any spillage could lead to slips and falls on the building site. Safety first!

  11. Paully says:

    Wow, that is quite the purchase agreement! Is the KY included or is that also an extra-charge item?

  12. Pen says:

    Priceless! Thanks for the hearty laugh.

    Especially this:

    “You see, we simply drew an 8-storey building to look as if it were two storeys higher than a 9-storey building, and to our surprise – it worked! “

  13. Irena says:

    This reads like my condo. All of it pretty much happened. We need changes to the Condo Act and support Rosario Marchese in his efforts.

  14. Ralph Cramdown says:

    If the market hits a serious soft patch, a lot of developers are going to be hustling their trades to complete — workmanship will get even worse. Cavalierly extending occupancy dates only works when the buyer would rather keep his accrued equity than lose his deposit. If the market value of buildings completing now dips to at or below what they were bought for in the sales centre + closing costs + selling costs, developers who send notices to extend might receive return missives saying “you can keep it.”

    1. Ralph Cramdown says:

      Come to think of it, if the developer asks for an extension and the buyer refuses to grant one, the buyer gets his deposit back, doesn’t he?

  15. moonbeam! says:

    Brilliant! should be required reading for condo-shoppers!

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