B.C. judge rules against pre-sale buyers

Last Updated: Friday, June 15, 2007 | 12:41 PM ET

CBC News

Thirty-two pre-sale buyers of a Lower Mainland housing development have lost their court fight to keep the homes they had made deposits on over the past two years.

The Riverbend developer terminated the pre-sale contracts for the 32 homes and returned deposits.
(CBC) A B.C. Supreme Court judge has ruled that the Riverbend development in Coquitlam should be finished and the homes then sold at current market prices.

CB Developments had sent letters to the buyers in April saying its lender was no longer willing to provide more money to finish construction, unless the houses were sold at the latest market prices.

The buyers then went to court in an effort to protect their contracts, which would allow them to complete their purchase at pre-construction prices established a couple of years ago.

They buyers already have their deposits back. But they have each lost on average about $80,000 of equity since they signed their pre-sale contracts – the difference between the price they agreed to pay and the current value.

They were very disappointed with the judge’s decision.

“Right now I have to pay $100,000 more,” said Uma Seetharaman. “I’ve completely lost faith in the pre-sale contract, and it is a total nightmare for us, to say the least.”

Sunita Chand told reporters she had lost her “dream.”

“I can honestly say I am very close to tears. I know I am not getting my house at the end of the day, that has been my dream for the last year and a half,” said Sunita Chand.

However, the judge also ordered that any profit made on the homes over and above what the buyers would have paid in the pre-sale agreements be held in trust until the courts decide if that money should go to the original purchasers or to the creditors.

The Riverbend development is now being run by a receiver, who is hoping that Carevest, the lender that pulled the plug, will be prepared to put another $3.8 million into the project to finish it. Carevest will lose even more money if it doesn’t.

It has to pay back wages to construction workers, the home warranty provider has pulled out and the provincial government is preventing any further sales until up-to-date disclosure statements are filed.