In the world of real estate, emotions run high, and so do budgets. It’s easy to see how a person or company can end up on the wrong side of the gossip mill. Whether it’s unpopular actions, distasteful conduct or just downright bad behaviour, here’s our list of the top 10 villains in Canadian real estate over the past year.
This might be a bit of a stretch but the Office of the Superintendent of Financial Institutions (otherwise known as OSFI) has become a persona non grata in many Canadian households, particularly those of first-time buyers. This distaste is primarily due to the institution’s latest “mortgage stress test” which has made it more difficult for buyers to qualify for a large residential mortgage. OSFI’s latest mortgage rule changes, which came into effect on January 1, 2018, resulted in a lot of buyers either rushing into purchasing a home before the new mortgage stress test took effect, holding out for longer before they buy, or adjusted their budget or property wishes in order to qualify for a mortgage.
2. Liberty Development Corporation
Buying into a pre-construction project already comes with risks: there could be delays in closing, you may have miscalculated your expenses and you’re not quite sure if the unit will look exactly like the floor model. But imagine if the risk you faced was that the unit you purchased just never got built? That’s exactly what happened for some pre-sale condo buyers in Vaughan, Ont.
In April 2018, two years after approximately 1,100 buyers has purchased units in the sold-out development, Liberty Development Corporation announced they were cancelling their massive condominium project. Why? An email response to media stated: “The cancellation of all purchaser agreements was made solely due to the inability to secure satisfactory construction financing. Purchasers have been advised that any deposits collected to date would be returned, in full, in the days to come.”
Some have speculated that the company cancelled the project in order to roll out a new one in order to take advantage of rising condo prices in the Greater Toronto Area (GTA). Others question if the company is financially stable. But what about all those folks who purchased a Cosmos Development unit only to see their investment go up in smoke? Unfortunately, they are left without a new home and must now shop the competitive condo market of 2018. Obviously, this makes Liberty Development Corporation one of the big real estate villains of 2018.
3. William Shatner
While most Canadians might not know too much about this story, William Shatner is definitely in the bad books of one of Toronto’s most prominent developers. Brad J. Lamb, the developer known for helping gentrify Queen West and, most recently, for spearheading Hamilton, Ont.’s large Television City project got himself in hot water with the Canadian-born Shatner. Apparently, Lamb chose to use the image of the original Captain Kirk to market his upcoming project. Lamb also named one of the two-bedroom penthouses in the complex the “William Shatner.” Does Mr. Shatner have a reason to be upset? Or is he just being villainous and squelching a bit of fun from a high-profile condo project? It really depends on which side of the builder’s fence you sit on.
4. “Liberty Village Cool Guy”
Potential roommates and landlords alike were scandalized to have been taken advantage of one Mike Lemke, a described “Liberty Village cool guy,” who took their money, essentially squatted on properties, and refused to pay back potential roommates who never even got to share quarters with him in the first place! How much did he end up taking? Amongst the eight known victims, Lemke is alleged to have stolen $14,150. Fraudulent behaviour is definitely villain material!
5. Brad J Lamb
The tables have turned on the prominent developer and real estate maven Brad J Lamb. This time he is the villain due to a cancelled condominium project in Edmonton, Alta.
About a year ago, Lamb Development Corporation, which is headed by Brad J. Lamb, announced that it would build a 37-storey condo building, known as Jasper House Condominiums On The Park (located on 106 Street north of Jasper Avenue). Construction was due to start in the fall of 2017, but a statement from the Lamb Development Corporation said it couldn’t meet critical dates in the purchase and sale agreements, according to the Edmonton Journal.
“The unfortunate economic circumstances that unfolded in Alberta over the last three years negatively affected our sales projections,” the company said in an email. “(We) felt that holding buyers to contracts signed in excess of three years ago was an act of poor faith.”
The most unfortunate aspect of this is that the recession in Alberta is really the main culprit here, as the building project no longer had the financial strength to carry on and hit key target dates to complete their purchase and sale agreements. For something that would have been a major boost to the downtown core, this is definitely the worst possible outcome.
Urbancorp’s behaviour in the last few years places the company firmly on the top real estate villain list. In early 2016, thousands upon thousands of dollars in deposits were not returned to prospective homebuyers when the company underwent “restructuring.” As the case unfolded (and bankruptcy protection was finally filed in April 2017), hundreds of buyers learned that they probably wouldn’t be getting their money back — and they had no new home to move into.
Turns out, only a small portion of the deposit money paid on a pre-sale condo (or house) is protected in Canada. For example, Ontario buyers can only shelter $20,000 of their deposit money, even though most buyers require two to four times that amount in deposit money for the purchase a new build condo.
Because these deposits were not held in trust, the company essentially spent it on more land and folded when they ran out of cash. What does that mean for all the folks who put money down? They’re out thousands, with nothing to show for it.
7. Tanya Hannah and Maurice Poirier
Two Moncton real estate agents make our top 10 villains in Canadian real estate as some of the worst agents in history (maybe ever! The Financial and Consumer Services Commission, which regulates agents in the province through the Real Estate Agents Act, found Tanya Hannah and Maurice Poirier to be unsuitable to be licensed and were stripped of their licenses for a year. Their crime? Taking advantage of a vulnerable senior and homeowner. The real estate couple bought the man’s house at a discounted rate and entered into a complex deal that ended up paying him less than $20,000 for an asset that was worth more than $300,000. While a year might seem too little for such egregious behaviour, the Commission has the right to assess suitability for re-licensing after the suspension is finished. Looks like a couple of bad apples just tainted the bushel. Thanks.
8. Trump Tower(s)
How can citizens wage war against a building? Following the election of President Donald Trump in 2016, concerned citizens of Toronto took it upon themselves to deride the Trump Tower located in downtown Toronto. Similar protests occurred in Vancouver, as the latest Trump Tower was nearing completion. Obviously, the buildings located in the urban centres of Toronto and Vancouver did nothing wrong but folks felt the Towers represented something ill-befitting on Canadian soil. While Vancouver city council chose not to rename the newly erected Vancouver Trump Hotel, Toronto protestors prevailed when the Toronto Trump Tower was renamed. That said, investors in Toronto’s former Trump Tower would probably put Trump at the top of their villain list. Why? In October 2016, investors launched a lawsuit alleging they were misled when they bought units in the residential portion of the tower. These same investors were vindicated in March 2017 when Canada’s highest court refused to hear an appeal and allowed the ruling, in favour of the investors, to stand.
9. The Zhang Family
The Zhangs were a big story coming out of real estate in British Columbia in early 2018. They were found to be using Vancouver-area real estate to park their illegal earnings. Apparently buying sought-after Vancouver property using money gained from drugs puts you front and centre on the most wanted list (and most hated). The worst part, their real estate purchases were just a form of money laundering — a pervasive problem that was finally unearthed after an investigation by the Globe and Mail‘s Kathy Tomlinson and Xiao Xu. This highly complex process makes for quite the story, almost from a movie, but it has a troubling end for all involved.
10. Timothy Harris
Rounding out our list of top villains is certainly one of the most bizzare stories to come out of Canadian real estate in the past year. Timothy Harris, a realtor out of Nova Scotia, was hit with a four-month suspension after stealing from one of his client’s homes. What did he steal? A framed photograph that he then posted online to his Facebook page under “Images of Nova Scotia, a private collection of Tim Harris.” While Harris did return the original photograph (after questions were raised) the homeowners filed a complaint that resulted in a licence suspension, a $4,000 fine (and more than $26,000 in legal costs).
The world of real estate can be complex, stressful and confusing but the purchase or sale of property doesn’t need the additional problems associated with criminal or bad behaviour — just try telling that to these apparent villains.