One of the following statements is true:
a) Developers have no idea when a condominium will be completed.
b) They do, they just don’t care to tell the truth because there are no repercussions.

When was the last time a developer actually quoted a reasonable time period to plan, sell, and construct an entire building?

Contrary to popular belief, it can’t be done in one year…

If a developer is competent enough to put together $200 Million in financing to construct a 400-unit condominium, all the while overseeing inventory, personnel, budgeting, etc., surely the developer has some realistic idea of when the project should be completed, no?

So is it then fair to say that developers go out of their way to lie about the estimated completion date of the project?

Yes, it is.

In fact, since there are really no consequences for being six months or six years behind schedule, why not lie right from the start?

Let’s say a condominium project is launched tomorrow called “Luscious Lofts.”  The developer has built a sales centre with a model suite, hired a real estate firm to sell the project, marketed the condominium to the general public, and is now ready to open the doors for action.  That developer is probably going to quote May of 2011 as the estimated completion date.

But what are the odds that the project is even started by then?

I’m gonna go out on a limb and say…..something like 50%?

You’ve got a 50% chance that the project is started by the time you are first promised possession?  Yeah, I’d say that’s accurate.

No construction project in the history of mankind (except the Pyramids in Egypt) has ever been completed on time, especially not in the world of condominiums.

I’m wondering what the public should have in mind for expectations.

If you walk up to day-one of sales at 2Gladstone, and they tell you that possession is October of 2011, how accurate is that?

If you purchased at Charlie in April of 2008, and they told you that the project will be completed no later than March of 2010, how do you feel now that they’ve finally removed the parking lot on the condo site – now in December of 2009?

My experience with West Side Lofts has been well documented.

I was promised possession in August of 2008, and they didn’t even break ground until March of 2009.

What a joke.

But you know what?  The whole industry is a joke; only it’s YOU that are the fool if you don’t see all this coming.

I’m going to write a post next week about people who buy pre-construction as a primary residence and what a mistake it is, but for now, I’ll digress and focus on the “honesty” on the part of these developers who promise the world and never deliver.

I walked by The Modern the other day and their sign says “Occupancy Summer 2011.”  That is just about the only quasi-accurate target possession date in the entire city.  Excavation for The Modern is almost completed and soon they’ll begin pouring the foundation and building the underground levels.

The condominium is going to be seventeen stories and 343 units, and I think that this could actually be completed by “Summer, 2011.”

But what is “summer?”

Most of us think of June or July, but the fact remains “Summer” extends to September 21st, so don’t expect to get your keys a day before hand!

So we’re effectively taking about twenty-one months to build this condo from scratch, including the excavation that is now almost complete.

I think that can be done!

Whoopie!  A condo that is actually completed on time!

But wait, there is a caveat, of course.

The Modern was launched back in November of 2007.  I’m guessing here, but I would think that original possession wasn’t quoted as “Summer 2011.”  Why?  Because they NEVER quote four years, even though it usually takes that long, or longer.

No, I would assume that when this project was launched in November of 2007, they quoted “Fall of 2009” as the possession date.  We know now, of course, that they didn’t break ground until a couple of months ago.

So once again, we see a condominium development that breaks ground around the same time that original possession was promised.

So what can you do as the prudent buyer?

1) Look at the DEVELOPER.
-How many condominiums have they built?
-How many projects are they working on right now?
-How many projects have they been late on in the past?
-Have any of their projects ever fallen through?

2) Keep track of the SALES.
-What did they sell on opening weekend?
-What was the rescission rate (ie. how many people backed out?)
-When will they reach 70%?

3) Protect yourself
-You can write-in any clause you wish, just give it a shot!  Tell them you want an opt-out clause if they delay construction.  I’ve included my own custom clauses in every pre-construction project I’ve ever been involved with.
-Consult a lawyer.  Don’t cheap out – pay the $500 and have a lawyer read through the 200-page disclosure statement.  It never fails to amaze me how many people will make a $400,000 investment and scoff at paying $500 for a laywer to “just read a few pages.”

Construction delays happen.

They happen with every project.

Your job as a buyer is to find the project that is least likely to delay construction.  If you want to be a “condo-flipper,” you’d better find a project that builds in two years so you can move on to the next – rather than spend five years waiting for one project…