I swear – I’m not turning this real estate blog into an exclusive forum for information about the West Side Lofts!
It’s just that there are still a few unanswered questions from readers that I would like to clear up.
And, I guess I should probably re-tell the story from the very beginning…
Believe me – I had other plans for the blog this week!
I didn’t want to drag out this West Side Story for another day, but there were so many reader-comments on last week’s blog posts and I think there are some questions, comments, and concerns that need to be cleared up.
So I’ll tell the story I feel like I’ve told a thousand times, and in the process, I can explain why I did certain things, and why things turned out a certain way…
May 14th, 2006 – that was when this all started.
The West Side Lofts was one of the first projects scheduled for Queen West in the area of the Drake Hotel, and it’s tragically ironic that now there are a half-dozen other projects either nearing completion or already under way.
The West Side lofts should have been the trail-blazer for the area, but after all the delays and re-designs, it will end up being finished along side its neighbours.
In May of 2006, prices in the Queen West area were ridiculously cheap.
You could have walked into the sales centre for the West Side Lofts and picked up a condo at just over $300 per square foot.
Fast forward to late 2009 when “2 Gladstone” launched, and prices were over $550 per square foot.
It all happened so fast, but the process itself was sooooo slooooow…
The first condo that I contracted to purchase was a 2-bedroom, 2-bathroom loft of 700 square feet for $230,900, or $329/sqft. This price didn’t include parking, however, but parking was only $19,000 and they were offering a $10,000 discount at parking that enabled me to get the space for a paltry $9,000.
The layout I chose was fantastic! The unit was a corner suite and had huge floor-to-ceiling windows throughout the living/dining/kitchen and bedrooms, and there was no wasted space.
A colleague of mine also purchased in the project, and upon his suggestion, I decided to turn the unit into a very large 1-bedroom suite by removing the wall that separated the left bedroom from the living/dining:
There was now almost forty feet from one end of the condo to the other! I was very happy with the layout, and I still couldn’t believe the price.
Everything looked so promising.
Maintenance fees were only $0.33 per square foot, all ceiling heights were ten-feet, and the amenities were going to be spectacular.
Closing was scheduled for July 15th, 2008.
Then in late 2006, I heard the first rumblings that the project was having “difficulties.”
I don’t like to spread hearsay, but the story wouldn’t be complete without it. Either there wasn’t enough money in the project for the developer to go ahead, or the city wasn’t giving them the zoning they wanted, or both. I would bet on both.
But I received a call from the sales centre in September of 2006 telling me that they had changed my ten-foot ceilings to eight-foot ceilings, and they didn’t consider this a material change.
I signed my first Mutual Release and Termination in September of 2006; the first of what would be three such releases.
Basically, the developer decided to take two feet of ceiling height from each floor and create a bunch of new floors to create new units and new revenue. The city had set a height restriction on the project, so if they couldn’t build up, they’d simply steal a few feet here and there and make some more money!
Lucky for me, the person who had the unit one floor above me opted out of his contract, and I was able to pick up his unit which happened to have nine-foot ceilings.
So here I was in October, back in the fold.
In January of 2007, I received the first of close to TEN letters that read:
“Pursuant to paragraph 45 in the Agreement of Purchase and Sale, the Vendor is exercising its right to extend the economic viability date to September 30th, 2007.”
Ah yes, economic viability dates.
Paragraph 45; she’s a beaut!
It’s a fancy way of saying that if at any time, the developer decides that the project is “not viable,” then he can return everybody’s deposit and just close up shop. This was somewhat foreshadowing…
The development continued to have problems with the city, as the city wanted “artist’s space” in the project, and I believe at one point there was talk of building a bridge from the development over the train tracks and onto the other side of King Street.
In December of 2007, I took a trip to Belgrade, Serbia. I like to travel in December and August – the two slowest times in real estate, and I returned around Christmas.
Upon checking my voice messages when I returned, I was informed that the project at West Side Lofts had effectively been terminated, but they were “re-launching” a new design, with new units, new layouts, and of course, new prices.
I met with the sales reps in January of 2008, and even though I was one of the first people to buy into the project in 2006, I wasn’t afforded any special treatment in the “new” project. In fact, they had spent December selling off all the “new” units, and when I sat down to talk shop with them, I only had a handful of options.
This answers one of the outstanding questions from my blog last week:
“Question…Why did you buy a unit with so much hallway? Don’t you find that to be excessive/wasted footage?”
One of my largest pet peeves in real estate is wasted space, and one of the best ways to waste space is by creating a long and useless hallway.
But I only had two options to choose from in January of 2008, and one was a 1-bedroom-plus-den that didn’t have enough windows, and the other was the 2-bedroom, 2-bathroom corner unit with the stupid, long hallway.
Thankfully, and for some unknown reason (since all builders are evil), the original purchasers in the ill-fated “West Side V 1.0” were given the same price per square foot in the “new” project as in the original.
I knew that prices had risen substantially in the past two years, and it was still a hell of a bargain even if the layout for the condo was less than ideal with the long hallway.
So I signed on the line which was dotted, and I was back into the West Side Lofts for the third time.
Only this time, I wasn’t nearly as diligent in reading the fine print, and as I learned last week when I read through FOUR disclosure statements (from 2006 – 2010) and three different Agreement of Purchase & Sales, the developer had made all kinds of changes to the features, finishes, and attached schedules.
I can’t lie to you guys – I think I got a little lazy.
I was so damn tired of this project and I just wanted it to be “over” in a way. I had played hardball with them for almost two years and this time around I just took what was given to me.
I guess that’s why my unit looks like it does.
In the past week, I’ve received close to thirty emails from owners at West Side Lofts, and many of them have told me that they wrote in special clauses or changes to the standard features – such as extending the seven-foot walls all the way up to the ten-foot ceilings.
The first time around, I made all kinds of changes!
I inserted a clause that said my parking space had to be no more than six spaces from the elevator, and had to be on P1.
I inserted a clause that said if I could prove ownership of a Hybrid automobile, I would be given a $5,000 refund.
I made so many changes to their agreement, and I enjoyed doing it.
But in 2008, I was out of energy, and I knew that my unit was nothing compared to the first one that I had purchased. So I just took what was given.
The new closing date was announced as November 15th, 2009.
Throughout the rest of 2008, I continued to receive notices about the “economic viability date,” even though during the 2007-08 sales process of the “new” project, we were assured ground would be broken in January of 2008.
Ground wasn’t broken for a full YEAR.
Perhaps that is why the building has such awful workmanship.
They rushed the construction of this project so much that I ended up with walls that look like this:
I’ve never seen anything like this before, but I guess that’s what you get when you rush-rush-rush to build a condo where construction started after original occupancy was supposed to have been given!
Once ground was broken on this project, it was like a countdown to disappointment.
During my PDI, I was like a child walking down on Christmas morning to discover there were no presents under the tree, and the tree was actually made of poured concrete…
So here we are in September of 2010, and I’ll be getting the keys to my long-awaited condo in one week.
People keep asking questions like, “How could you have let this happen?”
Honestly, I don’t think any of us have any choice.
Developers can do whatever they bloody-well please in Ontario, and consumers are helpless to combat the iron-clad Agreements that they sign.
There are so many loosely-worded clauses that say things like “if for any reason” or “without notice.”
Tomorrow, I’ll post an article by Toronto Star columnist Bob Aaron in which he outlines some of the hidden-costs associated with purchasing pre-construction properties in Ontario. Even Mr. Aaron calls out for “government intervention;” something I’ve been begging for over the last few years.
But as I see busy buyers going in and out of Post House, Berczy, and DNA3, it reminds me that ultimately, the consumer is to blame for getting involved in these projects in the first place.
I have stopped selling pre-construction altogether.
If a buyer comes to me looking to purchase in a development, I outline my reasons against doing so. And if the buyer disagrees with me, then he or she can contact one of the other 30,000 Realtors in Ontario for representation.
I don’t sell anything that I don’t believe in.
And after reading the preceding story about my experience with the West Side Lofts, I hope you all come to the realization that believing in pre-construction is like believing in Santa Claus…
JG
at 8:09 am
Wait? Are you inferring Santa Claus is not real? Here comes years of therapy!
I can see your point of just being ‘tired’ in 2008 after all that you went through.
Those are some bad breaks. Hopefully you get this turned around and at least have the inexpensive per sq ft in your favour to get a substantial return when you do eventually sell the unit.
LC
at 8:14 am
I have to respectfully disagree with your last comment. Yes, there are many sleezeball developers – I’ve worked for one – but, there are also many reputable developers who bend over backwards for their purchasers – like the one I’m working for now.
Do your homework on developers, look up their record at TARION, pay a few hundred bucks to get a lawyer to review your APS and everything that comes after. And remember, that when you buy from plan, you’re essentially buying blind. The risk is always there for something to go wrong, so it’s best to protect yourself by buying from a developer with an excellent track record.
Matt
at 10:36 am
LC is right…I’m not sure about bunching up certain buildings in the same category pertains to all…. some builders are good with their clients….
PostHouse to me is not gonna make it when only 25% (if at all) has been sold since 2 weeks opening only. And along with everyone I know who went to look, the plans are a disgrace! Absolutely horrible. And I’ve seen Lanterra projects and they are just so boring and cookie cutter. at almost $600psqft with parking (which is a crazy 39,500!!) it just seemed too much for the clients they want to attract… you can bet on a redesign on this project in a year..I called it!
DNA3..well at those prices and the area and from what I’ve seen, people love the low DP’s and the reassignment clauses…..
Berczy..well small building, high end $$, almost sold out at the start, then 85% sold at 1 month in to sales, currently 92% sold out of the 161 units available, mostly end user purchasers……closing its sales doors on the 15th Oct, groundbreaking…Nov 1, according to city is approved… may be worth it in the long run…and also provide some life and more value to the area…
but then did you not buy prebuild at REZEN?
dogbiskit
at 12:16 pm
Agreed with LC. Having taken occupancy of a new build earlier this year, the developer was really great with communication and fixing the deficiencies. They’re probably the exception rather than the rule though. Harhay.
West Sider
at 12:46 pm
Maybe the first sign of trouble with this project was that they couldn’t even find an original name!
The “Westside Lofts” have been at King & Bathurst (orange/yellow clock building) for 10 years.
http://westside.to/Westside.to/Welcome.html
Obviously, this developer was in too much of a rush even back then… they couldn’t even check a basic listing of downtown condos to find this?
Edmonton Real Estate
at 5:37 pm
I don’t recommend pre-constractions projects to my clients any more. It’s much easier to sell a property already built, a property at least couple years old.
David Fleming
at 7:33 pm
@ LC
I know, you’re right. There ARE reputable, trustworthy developers out there, but they are so few and far between.
And even the “better” developers still use a lot of the same deceptive tactics that the others do; they just don’t use them as much.
I don’t necessarily blame the developers, since it is the industry regulations, or lack thereof, that enable them to do anything they please.
But politicians aren’t exactly jumping at the chance to regulate the condo construction industry. They won’t win over any of the public by doing so when things like education, transportation, healthcare, jobs, and the economy are at the forefront…
David Fleming
at 7:35 pm
@ Matt
I agree about Berczy, but my point was that I wouldn’t be involved with ANY pre-construction project, and I just named the first three I could think of.
Perhaps it’s worth paying close to $600 per square foot at a place like Berczy when you know the project is selling, the project is on schedule, and they’re going to break ground. It sure beats paying $520/sqft for a development where the builder has a terrible track record and you know there are bound to be issues.
GeorgeJefferson
at 7:42 pm
Thanks for the clarification. That actually makes perfect sense. I can’t tell you how many examples of professionals I know who (for one reason or another) let their guard down when it comes to acting for themselves. Yet, in acting for or representing others, they’re at the top of their game. It’s quite common.
Considering we live in such a socialistic society, you would think though that our Government would catch up with legislation to protect the consumer.
Developers have incredible power.
Another example of this (sorry to change topic) is in Franchising. Franchisors have incredible power over their franchisees (also the consumer, per say). Just as there so many deceitful developers, so too are there deceitful Franchisors.
Buyers, please beware.
I hope it works out for you David.
GeorgeJefferson
at 7:53 pm
By the way, that first layout was wonderful..(sorry to remind you)
I especially like, what appears to be pocket doors on either side of the bathtub. I also like the fact that the powder room is located as far away from dining/living as is possible.
Damn Builders
David Fleming
at 8:08 pm
@ GeorgeJefferson
Great point about franchising, and excellent comparison.
I have a close friend who is jet-set on opening a franchise, at any cost. I spent years looking at franchising – I really wanted to open a Booster Juice next to the St. Lawrence Market, but then I realized a blender and some fruit on the street corner would probably make more money, and it wouldn’t cost $300,000 and have ridiculous restrictions and operating costs.
I’ve looked at Subway and Tim Horton’s as well.
My friend wants to open a hamburger joint on Bayview in Leaside – a franchise from an existing chain in Ottawa.
There is just too much control by the franchisors to ever really be able to “operate” the business the way you see fit.
Imagine having to buy all your bottles of Iced Tea and Pepsi from the franchisor, even if you can find a place that sells it for HALF the price?
LC
at 9:12 pm
@David – TARION was supposed to regulate the new home development industry via warranty protection, but as many of us know, TARION was also manned by the developers themselves. It’s slowly starting to change with the high number of claims and general fury of home purchasers, but, believe it or not, we are still miles and miles ahead of the other provinces, not to mention other countries!
Document everything, and I’d even suggest starting a steering committee among the purchasers to further document everything and band together to created a united front. Do you know who the property management company is yet? I’d hound them like crazy.
GeorgeJefferson
at 11:10 am
David,
You’re just skimming the surface of potential problems and issues.
For example, many prominent QSR franchises now require you to outlay capital expenditures at the end of a defined operating period (usually 10 years, which conveniently is often the first period of renewal) whereupon you must commit to retrofitting your establishment to meet current design standards. This is irrespective of the fact that the establishment might be in impeccable operating and design condition. They go so far as establishing a minimum budget, which in some cases (no names will be mentioned) represents hundreds of thousands.
Here’s another favourite…keeping the dining room open 24 hours when a drive-through would suffice. Think you have the option to do that? “You better think again Mojambo.” Gotta keep it open up until there’s “an incident” in which case that site will be ranked as high risk in comparison to others.
When it comes to franchises, I would offer the same advice as you do your clients when it comes to CityPlace: Look, Wave Hello, Turn Around and Run as fast as you can.
Cliff
at 12:30 pm
This is not surprising in the least bit. Developers in general do a poor job because frankly, they’re never held accountable. I have an investment property that just closed at the beginning of this year. The lobby has been flooded about 4 times, the elevators rarely work, and they just cut so many corners. Granted, the pre-construction prices were cheap, but it’s to the point where I would NEVER buy from this developer again.
I’d probably never buy pre-construction again either. There’s too much of a risk. You have no idea what your closing costs will be (if you didn’t put a cap on them…hope you have an extra $10K stored away), you’re told the building will be built in 2 years when it actually takes 6 years, builders can drastically change your unit and tell you “too bad”….and they want you to return the unit so they can sell it for much more, you move into a construction zone, workmanship is usually poor, you have to chase them down to fix any outstanding issues….and the maintenance fees are usually much higher than what you were promised. There are a lot more cons..
Resale is great because you know what you’re buying, you can research the building for any issues, can talk to neighbours, etc. You pay more, but the added piece of mind might be worth it.
Gotta love the whole “loft” popularity that’s taking the city by storm. Just another way for builders to save more money. Concrete ceilings + walls = no drywall or insulation = less cost for the builder….and poor soundproofing for the purchaser. Straight cash grab…and Tarion is not doing a good enough job at keeping developers honest and holding them accountable.
CRToronto
at 11:51 am
Hi everyone,
I’ve dealt from this builder before and never had any issues! I bought at Queen’s Harbour and loved my condo. The unit was finished beautifully, the building is great, the builder was easy to talk to and communicate with. They were very accommodating with any requests I gave them…
Richard LeBlanc
at 5:17 pm
Hi Dave,
Is Westside going to compesate you for the flooring or at least try to fix it? I have the same poor conditions on my cement floor that you have. The problem with Westside trying to fix it is that they will use the same trades that did the shoddy work in the first place and from my research, fixing poorly laid cement floors is not easy as it requires special agregates etc…
David Fleming
at 10:27 pm
@ Richard
I’m not counting on anything special from the developer.
I’ll be putting hardwood over those awful, jagged, rough concrete floors.
Lily Smee
at 10:30 am
Hi There,
I’ve had the exact same experience that you have. We actually bought the same 2 bdrm corner dream loft that you originally did and we’re so excited about being able to afford something that wasn’t a cookie cutter condo. Well, we went through the same headaches as you and just did our PDI yesterday. Disappointed is such an understatement. I would be interested in putting together a group of disgruntled westside loft purchasers and putting forward a formal complaint to their lawyers. Please email me if you are interested.
Jess Fish
at 11:44 pm
Hi David,
I took possession of my “loft” last Fri and asked the builder what kind of padding (if required) to put in if I would like to put laminate or engineered hardwood. Since the unit is technically not mine until registered, builder told me that they have no guidelines and I should not do anything because if I break something, the warranty will not hold. True?
I read that you would like to install hardwood flooring, have you done so and if yes, was it glued or clicked?
Thanks.
David Fleming
at 11:56 pm
@ Jess Fish
I don’t believe in any builder’s warranties anyways, so I went ahead and installed hardwood flooring in my condo. It wasn’t glued down, but you can essentially do whatever you want. If you just took occupancy on Friday, congrats – you’ve saved about $12,000 in occupancy fees that the rest of us had to pay!
Lui
at 1:07 pm
Tarion is a joke anyways,they more supportive of the builder than the buyer.Like David mentioned builders can do what ever they want and their is nothing we can do about it.
Tara
at 10:47 am
Hi David,
I have just seen a loft in WSL that I am interested in buying. I am a Canadian citizen living abroad, so I am going to rely on my family to make the call.
Now that ‘the dust has settled’ (or has it?) would you recommend buying in WSL? If I’ve found a totally refinished and upgraded unit?
Do you face other major issues?
Looking forward to your feedback, or anybody else out there that lives/lived in WSL.
Regards,
Tara