A builder with a presold site for almost 150 homes in York Region is now confidentially selling the site & all 150 homebuyers will get deposits refunded & agreements cancelled. Pretty sure they were “reservation agreements” so they have zero legal value. I have warned about such… twitter.com/i/web/status/1…
Update on this developing story - this builder is now selling 4-5 sites, each with 150-300 presold/reserved homes. If one looks back at my tweets from one year ago, I had actually identified the builder and described exactly what’s unfolding now. Spoke to journos and regulators… twitter.com/i/web/status/1…
They are selling their Ferraris. AMG Mercedes, their Rolex sky dweller watches. Firing their in-house custom tailor, in-house legal counsel & about 70% of their staff. 2nd & 3rd mortgages on newly bought mansions in York region. Selling off lots of extra office space they bought… twitter.com/i/web/status/1…
Ok so it gets worse….much worse. They were actually firm sales agreements & deposits were partially already spent. Debt is greater than the value of the projects. We may be looking at a worst case scenario here where purchasers actually lose deposits & don’t get the house… twitter.com/i/web/status/1…
CFO got fired and blamed but you can’t blame him alone when you’re the one spending deposit money like it’s going out of style. Earlier this week it was blamed on a hack at the bank….simply untrue. If you hold 2nd mortgages or worse, kiss your money good-bye. I actually haven’t… twitter.com/i/web/status/1…
The last few days I’ve been chatting with lenders about the implosion of a builder we all knew. It’s definitely very news worthy and MANY people are impacted that don’t know yet. The lenders that I’ve been talking to at Meridian, TD Bank, Kingsett Capital & others r scratching… twitter.com/i/web/status/1…
Buses full of (mostly Chinese) buyers were brought in to their offices to buy homes that they’ll now never get. They don’t even know this yet but it’s been two weeks that everyone in the industry has known about it….and it looks like nobody else. So many stakeholders,… twitter.com/i/web/status/1…
Still seeing ads for townhouses for sale in projects that have gone bust and buyers will lose deposits. Even buzz buzz is running ads for this builder weeks after it all imploded but they probably don’t know bcs it’s not reported on
There’s talk that the builder was engaged in a $37 million check kiting scheme and TD Bank caught them and came to a settlement whereby they now have liens on all their properties. Very likely there are many criminal charges in their near future
Adding to this thread - My advice to the public as a developer & builder of decades is this - DO NOT DO RESERVATION AGREEMENTS. A builder who is doing reservations is likely more desperate than 1 who waits until he’s ready 2 start servicing the site, and only then starts selling
These reservation agreements are becoming more widespread. Remember the builder whose name you saw on a reservation agreement. Do your DD….they’re probably not that great
Morning @ONmunicipal #tore Adding to this thread- 1 month has passed, 100s, if not over 1k homebuyers impacted, fraud, numerous news articles, apparent misuse of publics’ funds, demands 4 answers & ZERO statements from regulator @Tarion_ON or hcra. Evidence all over the internet
What has become clear from court docs is that #stateviewhomes used one project as collateral for another. All deposit money is gone, though most projects haven’t even started construction yet. All projects have more debt than the purchase price of the land. In other words, —-
Money from each project was used to fund other projects and most likely, personal expenses. Typically deposits plus equity are required in addition to debt to complete construction financing. This was a Ponzi scheme where money kept leaving but not returning except for display
Purchasers from high crown have waited years and now may only get $100k from tarion because they cross collateralized the hell out of it & it’ll end up going into receivership sooner or later. How do you build w/o staff or cars or when the project is totally underwater
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