A ‘Sign’ That Developers Don’t Care

Condos

2 minute read

March 1, 2012

It’s a bit of a rant, but it’s all I can do to finally get the point across to the last 1-2% of people who still think that it makes sense to buy pre-construction in Toronto in 2012…

Eeeek!  Excuse the poor audio!  I filmed this twice and both takes had the same audio problems!

Well, sometimes the best points are those that are the hardest to articulate, so I’ll chalk this up to a tragic case of irony.

Last week’s discussion about pre-construction condos was encouraging for me because other than the one Realtor who still sells pre-construction to his clients, everybody else that posted seemed to be in agreement that the prices clearly make no sense, and the risks associated with partnering up with developers are simply too dangerous to make the venture worthwhile.

On Monday Evening, NDP MPP Rosario Marchese held a Q&A session at the Duke of York Pub (I think you’d have to be drunk to deal with the issues that plague the condominium industry…) where he discussed his proposed Condominium Owners Protection Act.  The bar was packed, to nobody’s surprise.

What’s been going on in the condo construction industry over the last 5-6 years is nothing short of pathetic.  Developers have figured out how to exploit consumers, both those naive and informed, and get away with whatever they please.

Mr. Marchese realizes that the 15-year-old Condominium Act needs to be updated, because developers have learned how to work around what few rules and regulations exist.

It’s like the collective bargaining agreement in the National Hockey League that is re-negotiated every 5-6 years.  After the last agreement was reached in 2005, it only took NHL general managers a couple of years to manoeuver around the rules.  They started signing players to 15-year, “front-loaded” contracts where a player makes $11 Million in his 1st year and only $500,000 in the 15th year, thus making the “average” contract (for salary cap purposes), maybe, $5 Million.  Then when the player retires at 39-years-old with four or five years left on his contract, they just buy him out.

NHL general managers learned how to take the existing rules and rearrange them to suit their own needs.  Eventually, the league stepped in and voided a couple of these ridiculous contracts, and this will be dealt with in the off-season when the collective bargaining agreement is renegotiated.

The Condominium Act has never been updated or “renegotiated,” and consumers are suffering.

Some developers have no shame, and while my frustration with the “OCCUPANCY SUMMER 2011” sign is overblown, it’s just a microcosm of the condo construction industry as we know it…

Written By David Fleming

David Fleming is the author of Toronto Realty Blog, founded in 2007. He combined his passion for writing and real estate to create a space for honest information and two-way communication in a complex and dynamic market. David is a licensed Broker and the Broker of Record for Bosley – Toronto Realty Group

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5 Comments

  1. earlybird

    at 8:03 am

    can you show us some examples where the developers actually care?

  2. Chris

    at 9:36 pm

    David,

    Can the buyers of the pre-construction condos walk away, if they give up their deposit?

    Thanks,

  3. Geoff

    at 10:09 am

    @ chris – typically these contracts are written by the developers lawyers who slant the downsides of not closing very much in the developers favours. The BEST case scenario is likely just the buyers forfeiting the deposit; the more likely scenario is that they are sued for damages (ie materials ordered to fullfill this order, people hired, etc etc)

  4. Krupo

    at 1:20 pm

    Dave, pull down the video – or just cut it so you only have the first half, no point in subjecting visitors to that much static-crackle-pop

    1. David Fleming

      at 7:46 pm

      @ Krupo

      Embarassing, isn’t it?

      I spent all that money to upgrade my a/v and THIS is the result?@!?!?!

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