The steep cost of housing has triggered intense competition for properties priced between $350,000 and $750,000. As Vancouver townhouses and condos are primarily the market that fall within this range, pricing on these properties has surged over the last few years. During this time, VivaGrand has put the brakes on Langara West, a residential development that was supposed to feature 71 residential units and 5000 square feet of retail space.
The one, two, and three-bedroom condos that were pre-purchased had been sold at a value of about $700 to $900 per square foot two years ago. Today, similar properties in the area are fetching prices of between $1,200 to $1,400 a square foot.
Although the developer has offered to return buyer deposits, plus interest, and an additional 50 percent of the down payment in exchange for a release, nearly one third of the buyers are refusing and are challenging the developer.
The developer ended the project in August, announcing that the land, which was purchased in March 2014 for $12.5 million, will be sold. Rising costs, permit delays, and loss of financing were to blame, according to a termination letter received by the investors.
The group of buyers intends to argue that there has been a “fundamental breach of contract” that invalidates any “limitation of liability” cited in their purchase and sale contracts. According to the province’s Real Estate Development Marketing Act, developers must disclose information and updates about the strata site and financing.
However, the developer told buyers there was a firm commitment by lenders to proceed with the project as recently as January of this year. Eight months later, investors received a letter citing that permit delays had caused the banks to walk away from financing.
If there has been any misrepresentation in the disclosure statements, the developer could be held liable to purchasers for damages, according to lawyer Timothy Peters, who has been retained by around 25 of the 71 buyers.