The most significant problem that consumers face when buying a condo in Toronto is the “Occupancy Period“.
Talk about a “licence to steal” for developers!
I was having lunch a couple months ago with a Miami developer. He was actually a South American immigrant to the U.S. and had been a developer back in Argentina before moving to America.
I’ll never forget the look of bewilderment that came across his face as I laid out for him how things work in the Toronto condo game.
The first words to pass his lips were”that’s incredible” as his eyes crossed! He was sure that I was putting him on.
To think that you could take on “option” on a piece of land and presell a condo on it, and then having a building built on it and requiring those unit buyers to move in before the building is finished, and then be given three (3) months to address the deficiencies that the owner identified when moving, was mind boggling!
When I told him that all the developer needs is an operational bathroom in your unit to force you to accept “Occupancy“, he literally could not believe it.
I showed him photographs of the elevator and hallways at Churchill Park Condo where I had purchased and moved into a $1 Million Plus condo. After paying top dollar for a place to live, owners were required to live amidst a construction site, with the elevators clad in plywood, the halls without carpets or wall paper, dust and dirt everywhere, not to mention the throngs of construction workers and their childish graffiti on walls and elevators!
I don’t think that I could adequately articulate the expression on his face. Close to abject horror I would say!
Who in their right mind would give a developer that much leeway. Developers are not “institutions” like banks, they are usually entrepreneurs (mostly x-lawyers with lots of money to begin with) with the sole intention of squeezing every dollar out of every development that they do.
Nothing wrong with that in my books, but what is wrong is the flagrant abuse that condo buyer’s in Toronto are required to endure at the hands of these “free market capitalists”.
I recall negotiating a high end penthouse for a client of mine when negotiations broker down over a couple hundred dollar microwave oven! Now, you know a developer is cheap when they won’t throw a $200 expense into their costs to synch a Million dollar deal!
Developers, like everyone else are just “people“. They don’t have any ethics requirements, social responsibility needs, or any other logical oversight mechanism placed on them so they can really do whatever they want, and they have known this for decades, (ever since I’ve been in the business which is when condos came into existence).
I’ve long heard it said that “power corrupts and absolute power absolutely corrupts“! Well, money is power in the condo business thus corruption is literally everywhere in this business.
How is it that in a country that prides itself on requiring ethical conduct in business allow such a travesty to exist for so long?
The construction industry is a key factor in all government’s propaganda about employment. If anything is done to curb the rampant abuses in Condo Land, it would significantly negatively impact construction which equates to a negative reflection on the economy.
If you Google “Condo Nightmares” you will find an unlimited array of real life consumer night mares resulting from having purchased and moved into a pre-sale condo in Toronto and elsewhere throughout North America.
The stunning reality is that consumers have absolutely no rights or protections other than some “fluff” assurances under the Tarion New Home Warranty but even then, it is humorous to think that anyone could really thinks that they are protecting consumers.
Is this nightmare scenario fixable?
I could do it in a matter of weeks but you’d have to start from the ground up meaning, fixing the Condo Act itself, then tearing down and rebuilding the New Home Warranty to legitimately “protect” buyers.
First we’d have to tear apart the Building Code as it hasn’t been upgraded since I entered the business in the 1970’s! Slabs used to be required under law to be 18″ thick while today, thanks to new technologies and materials they are just 8″ think.
I read a developer trying to justify their unjustifiable case in Faulty Towers (an absolute must read for anyone thinking of buying a condo in Ontario) by bragging that “the use of these new materials gives buyers more head room“.
Simply building condo units with higher ceilings would do that! And the removal of that 12″‘s of concrete has totally removed any remote chance of enjoying a quiet living environment.
The number one and two complaints from condo owners is that the “noise transfer” and “odour transfer” (smokers stench invading non-smokers units) between units is simply downright non-existent.
Who ever said that 8″ of concrete represents a sufficient sound barrier? The Building Code (antiquated but still standing) doesn’t even address sound attenuation!
When I was fighting with a developer’s litigator for having published truthful comments on my blog about their sound deficiency in their development, I contacted the city inspect who told me that “we don’t even physically go out and inspect the buildings . . . the developers know the Building Code and we expect them to adhere to the Code“.
So, the City expects “the fox to oversee the hen house“.
At College Park, when I was forced to install complete new wall systems over sound penetration from the townhouse beside mine, we discovered that the developer hadn’t even used studs! They had glued the drywall onto the cement!
Now, I ask you how much thought do you think that the developer invested regarding the “quiet enjoyment” of the finished product?
So would you have a claim under Tarion the way things are today? Absolutely not! The building is “built to code” (allegedly according to the City Inspector who doesn’t even verify that claim)!
So how do you fix it. Our politicians in the position to truly protect consumers should hop on a 3 hour flight to south Florida and spend a day talking with people there to see how they do it.
Buyers simply take possession of their real estate and pay for it when it is ready. They make instalment payments much like we do here, but they don’t have to live in a construction site!
They make their 15% – 20% deposits and wait until they can move in. If the building and/or unit is not completed, they receive the dignity of waiting until they move into what they bought!
They didn’t buy into a construction site with a monthly rental (“Phantom Mortgage“) that does not even accrue against the purchase price! So, you end up renting the nightmare (which doesn’t by the way stop with the “turn over meeting“) and buying the deficient unit!
The remedy to all of this is quite simple. Implement a consumer protection plan that requires developers to do what they are being paid to do without being unjustly rewarded.
Stop Occupancy Fees (can add tens of thousands to your purchase of your condo) by stopping “Occupancy” and make developers finish their buildings before getting financially rewarded. Then make remedying deficiencies an immediate thing as opposed to the 3 months granted to the developers now.
Have the Engineering Efficiency Audits completed immediately and require settlement without stonewalling and delays from the developer seeking to pass the one year requirement set out under law. Today they get their money before having settled construction quality disputes introduced by objective third part engineers.
Why should newly formed condo boards be left to negotiate getting things completed properly with the developer? Is it not to everyone’s best interests (and society at large) to insure quality construction!
At Churchill Park the developer put the garbage separating machine “in backwards” and once the building was built, it could not be remedied at all! So the buyers have to live without a key environmental component of their building (separating garbage at the chute).
At College Park the developer didn’t dig a foundation for the townhouses and only after a horrific fight with me where I made them cut holes in the existing walls and insulate the foundation walls and even then, after a huge fight, they didn’t think to did down to the frost line to insure that the freeze didn’t simply enter under their insulation!
We buyers were left with no protection or remedy. Under dispute they returned and install (very environmentally unfriendly) electric baseboard heaters to offset their deficiencies!
It would not be hard at all to fix this nightmare situation usurping people’s dreams of owning “that magnificent home“, you know that “Castle that everyone is supposed to one day have“!
In Toronto and throughout Ontario (and I assume many more locations) the dream of ownership far too often comes out a night mare!