Here’s a very unique story, as it involves something that I never did in all my years as one of Toronto’s top Buyer Agents.
A few years back I started blogging about the dysfunctional state of Condoland, specifically regarding over-building and unjustifiable price escalations (250% in just a few years!) to the point where I simply gave up investing myself and/or recommending to my global readers that Condoland was a sound investment destination.
A good client of mine, whom had bought a number of properties through me and whom I made fully aware of my hesitation in advising him to buy anything, asked me if I would “split the commission” with him, on a unit that he wanted to buy despite my warnings of a potential market correction.
I never told anyone that “I have a crystal ball and/or categorically knew or had any idea as to what the future holds or held“.
Back when I was full time active in the business, I refused more similar offers to split commissions than you can imagine.
I actually “earned my commissions“, by steering my clients to only reliable developers and structuring their investment strategies including potential, end-game exits (most fights with developers come after occupancy).
I was one of the top producing agents for Cityplace, but I confirmed with each of my clients buying, that they had to “sell the units within 3 years“, as I was extremely cautious about the Hong Kong developers from Vancouver (following the leaky condo fiasco back in the 1990’s).
The list of law suits that followed many of Cityplace’s towers “Registering“, solidified my advise to my clients.
I have to be honest here, I do have one client that bought as their home and still today live in it and still actually like it.
The constant elevator chaos (not totally unique to Cityplace) would drive me crazy and the $30 Million law suits substantiate my caution.
If you have watched the “Marketplace” (CBC Television Show) on the home page of simplycharles.com, you will see CBC profiling the launch of 1 Bloor East!
I blogged ahead of this launch that this no-name developer (“Bazis“) “would end up not developing this building” but my comments (along with a whole lot more) were said to be considered “too controversial” for CBC’s lawyers and they did not air my warnings to consumers.
CBC had asked if they could attend the Private VIP Event with me.
I had learned, and told CBC, about the developer’s distasteful handling of Realtors (I wouldn’t agree to work with them as I always had to have some kind of tangible track record of any developer prior to recommending any of my global investors to jump in).
Well, the truth is, that this no-name developer ended up “screwing” the Realtors that they had assigned entire floors to, that were pre-sold “BEFORE” the supposed, “VIP Pre-Launch Event” only to turn around on the day of the event and impose price increases, across the board.
This meant that all those Realtors holding all those agreements to buy, had to go back to their clients and inform them that “the only way they could get that suite that they had already agreed to was to increase the price substantially“.
The site (as I had told CBC) collapsed shortly following the phoney VIP Pre-Launch Event, just as I had foretold!
That was enough to convince me that I would never work with or endorse “Bazis“.
So a couple years later this good client came to me asking about “Emerald Park” in North York.
I was quick to share my impression of what appeared to be a highly unethical and calculating developer that had exploited Realtors to go and do their work, and then when they had done their work and were ready to hand their clients over on a silver platter, the developer underhandedly hit them with a price increase!
If you’ve followed this site long you will already be aware that “Ethics” is a paramount issue with me. It didn’t take me long to share my concerns and their foundation about this developer.
This developer had already failed once miserably, especially with me (and shown a complete lack of integrity) and I felt obligated to warn my client, but he was determined to buy, if I would split the commission with him.
I was in Florida for the winter and reluctantly agreed and did the deal remotely from there.
“Bazis” wasn’t really the developer on this development either!
Plaza Developments (used to be Plazacorp until they changed their name – “why would a developer change its name“?) an established (lower-middle market) Toronto area developer had apparently agreed to be the “frontman” for them on this project (and others it turns out).
Their buildings (they’ve done a couple and have others that are in the building stages) emphasize Plaza because this no-name developer had no track record (or possibly worse) at all!
If you know this business you will know that the consumer never finds out the failed track record of developers because they don’t put their name on anything – they hide behind numbered companies.
So now, with my client’s split of the commissions due, neither I, nor he, can even find these guys, let alone communicate with them!
All their numbers refer you to another number and you go around and around in a loop and never even get to leave anyone a message!
I have a complex web of phone numbers and names but they all led in a circle with no answering machine.
How could this be possible when they just closed a 1,000+/- unit development?
The matter becomes much more cloudy when you realize that the real estate office that held my license at that time got busted by RECO for “the broker and owner stealing trust fund money“!
My client was “Closing” his transaction with them and I immediately went to him and told him of my inability to contact them.
We had a Court Order which I had sent to them and to their lawyers but had never received even an acknowledgement of receipt.
Now, holding hundreds of millions of dollars, the company is a ghost!
How can that be?
That’s a good question! But ghost they are.
When I told him he should go directly to them (the money is owed to him) as one of “their buyers“, he thought it a good idea.
After almost three months of running the circled phone dodge without even a message machine, his disbelief that I had tried everything vaporized!
His amazement continues to escalate each day that he had tried unsuccessfully to get his hands on his money!
He can’t believe that the brokerage that represented his interests in the transaction got put out of business for theft and he can’t believe that this company, that he just handed over hundreds of thousands of dollars to, can “hide in plane site“!
We have a Court Order that “Bazis” is choosing to defy (to their potential detriment).
I served their law firm by registered mail including a copy of the invoice for the funds and a copy of the court order.
All to no avail.
I’m confident that my client will continue to chase the thousands of dollars owed to him by “Bazis” but not as confident that he will ultimately be successful.
So, the next time you are about to commit a friendly half million or (approximate cost of a modest condo in Condoland) so in a condo, you had better have a good handle on who that developer is and/or are they actually developers at all.
To become a developer needs and takes only money!
There are no qualifications, requirements regarding integrity, ethics, or the like.
No ethics, integrity, legitimacy, or experience required here in Condoland!