myleakycondo.com's Blog

CTV.ca News Staff
 
Updated: Mon. May. 7 2007 10:07 PM ET

A B.C. politician is demanding the government step in to protect dozens of outraged families who put deposits on homes being developed in a Coquitlam neighbourhood, only to find their contracts cancelled and deposits refunded.

Stephen Bulat, who placed a deposit in August 2005, was supposed to move into his new "Riverbend" home with his fiancée by April 2006. Instead, he received a shocking letter from CB Developments.

"The letter said that because of cost overruns and delays in production that CB Developments were unable to fulfill their contractual obligations," Bulat told CTV on Monday. "They had mailed us back our deposit cheque as well as the cheque that we had given towards the upgrades."

The letter came after a flurry of production on the site in April.

"We (originally) thought 'Great, our house will finally be done.' We were very excited," said Bulat.

However, he was told by CB Development's operator, Craig Lochhead, that at current prices, there was no way the company could break even by selling the homes for the original price -- and that the only choice that they had was to sever contracts with the existing homes and re-list them at current market value.

A statement from Lochhead's lawyer blames the finance company for refusing to provide more money to cover them.

"As a direct result of the position taken by the construction lender, the company is unable to fulfill its contractual obligations to the purchasers by delivering clear title on closing," said Lochhead in the statement provided to CTV.

Bulat was also told that he would not be given the rights of first refusal -- meaning he'd have to compete with other buyers to repurchase his home.

Melanie Betz also bought a Riverbend home two years ago. Like Bulat, she sold her old home, believing she would be living in the brand new suburban development.

"We want the house that we bought and we want it at the price that we agreed on with CB developments," she told CTV British Columbia.

"It's completely unethical. I cannot believe he's done this to so many families. Where are we gonna go?"

Donna MacDonald said she's still "in shock" after buying her Riverbend home for $339,000, only to find she needs to find another place to live. MacDonald had sold her condo and has been living in a friend's basement with her daughter for a year now.

"This is unconscionable," Peter Simpson, CEO of the Greater Vancouver Home Builders Association (GVHBA), told CTV British Columbia. "No reputable builder in business for the long term would ever treat his customers in this manner."

"I'm sure there's some cost overruns for builders -- but in the end you fulfill your obligations and in this case it's letting your purchaser have the homes they bought."

Simpson said CB Development is not a member of the GVHBA.

Political reaction

No clear statute exists to stop a builder from breaking a pre-sale contract. But the MLA for Port Coquitlam says the province should step in and force CB Developments to keep its word.

"I think it's absolutely outrageous and absolutely disgusting," Mike Farnsworth told CTV British Columbia in Victoria.

"Clearly there needs to be legislation in place to protect consumers because this is just wrong, this is absolutely wrong."

Farnsworth and Diane Thorne, MLA for Coquitlam-Maillardville, raised the issue in the legislature Monday.

"I would like to know if the solicitor general will be investigating the recent real estate practices of a well known Coquitlam developer -- practices which have resulted in dozens of families in my riding being ripped off and losing their dream of home ownership?" said Thorne.

In another twist that has angered buyers, the real estate agent listed to sell the properties for a second time is the developer's wife, Marion Lochhead.

MacDonald called the revelation "very financially convenient." She plans on taking the company to court.

"I've lost market value here in the last two years. I lost market value on the home I sold in the last two years," MacDonald said.

"If this is just a greed issue, yeah I want blood."

With reports from CTV British Columbia