Buyers who have been waiting years to move into homes at a pre-construction development north of Toronto are facing more uncertainty and delays, after the project was placed into receivership earlier this year.
Operating as Mapleview Developments, Richmond Hill-based Pace Developments was building more than 1,000 condos and townhomes in six phases on 20 hectares of land across from the Barrie South GO station, near the intersection of Yonge Street and Mapleview Drive E., about 100 kilometres north of Toronto.
But the future of the partially-completed Urban North Townhomes project, which first went up for sale in 2018, is now up in the air.
“I feel betrayed,” said Melenie Chan, who paid a $25,000 deposit after signing a sales agreement for a two-bedroom unit in September 2018.
“It’s just sickening that they can take my money … I feel like I can’t do anything.”
The project is the latest Ontario residential development to enter receivership — a court-led process secured lenders can use to recover costs from assets, usually through a sale — as some developers struggle to complete projects amid elevated interest rates, high construction costs and a slower real estate market.
10s of millions of outstanding loans
A judge from the Ontario Superior Court of Justice appointed KSV Advisory in March to take control of the project, following an application by one of its lenders, KingSett Mortgage Corporation, claiming the developers have missed payments and it’s owed more than $47 million plus interest.
Dino Sciavilla and Yvonne Sciavilla, both directors of Mapleview Developments and Pace Developments, are listed as guarantors of the loan, according to court records and the Home Construction Regulatory Authority (HCRA), which regulates home builders in Ontario.
“The applicant has lost all confidence in the debtors’ management … specifically due to their significant debt load and dire liquidity issues,” lawyers for Kingsett argued in their application.
In addition to at least three other lenders, who are also owed millions of dollars, 10 construction liens have been registered against the property, with the largest held by Condrain Group for more than $4 million.
Kingsett argued the appointment of a receiver would “provide the most effective and appropriate method of effecting an orderly, efficient, and transparent sale of the property.”
Pace Developments didn’t respond to requests for comment CBC Toronto sent via email and phone.
Buyers waiting
Chan said she and her husband bought the home for their son to move into after he graduated high school.
Their sales agreement identified the first possible move-in date as July 2021 and the last possible date as October 2023, although Chan says the closing date has been pushed back multiple times, with the latest being July 2024.
“We wanted to give generational wealth to our kids,” Chan said. “We wanted to be able to secure something for them so in the future they’re not struggling like how we did, you know, and it’s so upsetting because I feel like we can’t get there.”
Chan said it’s now unclear when, or if, she’ll get the home, whether her sales agreement will be honoured or if she’ll have to pay more to hang on to the unit.
Anna Mutetwa signed a sales agreement for a condo in August 2019, with an estimated closing date of October 2022. She said it took all of the savings she had to put down the $25,000 deposit. She planned to move in with her kids, but instead she’s still renting.
“I’ve missed out on the pride of ownership. I’ve missed out on building equity. I’ve missed out on giving a stable home for my children,” Mutetwa said. “I think there should be laws and regulations that regulates these developers, and they should be financially transparent every step of the way.”
‘No action has been taken’
In a notice to home buyers published in April, KSV Advisory said it’s currently reviewing the status of the project.
KSV said sales already closed for 264 of 311 units in the first two phases, while the remaining 47 units are partially complete. There are “a number” of pre-sales for phases three and four, the receiver said, although it didn’t identify how many. Construction hasn’t begun on the final four phases, KSV said.
“At present, no action has been taken … with respect to the project completion or any purchase agreements,” the notice reads.
“The purchase agreements remain in full force and effect, subject to the terms of the receivership order.”
Mark Morris, a real estate lawyer with LegalClosing.ca, said there’s not much buyers waiting to take possession can do other than wait to see how the receivership process plays out.
The options available to the receiver include cancelling existing sales agreements and then selling the project to a new developer, Morris said.
But because of the amount of money already invested and tepid demand for new builds, Morris said the receiver might decide that the best way to maximize value for the lenders is to honour the existing sales agreements and appoint a general contractor to finish the project.
“What I think will happen in this case is that — the sunk costs having already been largely absorbed — these contracts will be completed regardless of how and by who,” Morris said.
“They’ll be completed to the standard of the Ontario Building Code and the purchasers will be forced into a closing position, though it will be delayed.”
KSV Advisory didn’t respond to a request for comment.
HCRA takes disciplinary action
CBC Toronto previously reported on this development in 2021, when Mapleview Developments sent letters to some 70 Phase 1 buyers, saying it planned to cancel their sales agreements unless the buyers paid an additional $100,000. The developer cited challenges related to the COVID-19 pandemic as its justification.
The ensuing controversy prompted criticism from Premier Doug Ford and an investigation by the HCRA.
“Nothing burns me up more than that — some developer just trying to make extra money off the backs of hard-working people. Unacceptable,” Ford said at the time.
“You signed a contract. You better … build that damn house.”
In November 2023, the HCRA referred Mapleview Developments to its disciplinary committee, alleging the company “unlawfully terminated dozens of agreements of purchase and sale … and misled 33 purchasers to unethically extract over $3 million from them.”
HCRA alleged Mapleview altered 20 of 35 sales agreements it provided to the regulator to make it appear as if the cancellations and price increases were lawful and allowed by the agreements.
A date for the HCRA disciplinary hearing hasn’t been set.
Source Agencies
