People who bought units in a condominium development in Ontario said they were shocked when the developer raised prices and asked for more money despite signing contracts.
“They want me to pay almost $280,000 more for the same device. I’m just shocked. I mean I can’t afford it purely and simply because I’m retired right now,” he said. said Terri Ramsey of Mississauga, Ontario. noted.
Ramsey said she put a down payment on her Burlington condo unit in 2016 and was waiting for it to be built. She then received a notification that due to rising construction costs, she would either have to pay more for her unit or take back her deposit and vacate the unit.
Ramsey signed a contract and made a deposit to pay $385,000 for his unit, but was recently told the price had risen to $663,990, or $278,990 more.
“I thought, ‘Finally when I retire, I can live where I want to live in beautiful downtown Burlington,'” Ramsey said. “There’s no way I can afford that extra money and demanding that I find it is grossly unfair.”
Poonam Sharawat of Mississauga also made a down payment on a unit in the same development in 2018.
“I wanted to have a place to retire and have something where I wouldn’t be paying $3,000 in rent every month,” Sharawat told CTV News Toronto.
Sharawat signed a contract to buy her unit for $435,900, and was told that if she still wanted the unit, she would have to pay $549,900.
“I don’t have another $120,000 to give away. When they told me about it, I couldn’t sleep,” she said.
The condominium project is with ADI Developments. President and CEO Tariq Adi told CTV News Toronto that “unprecedented cost increases” have left them with no choice but to ask for more money.
“We have worked hard to maintain our original 2015 selling prices for buyers, but there have been unprecedented cost increases and material shortages in the industry,” Adi said. “With significant delays in approvals and the impact of construction cost inflation, subcontractors have opted to back out of contracts they had previously signed to avoid their own losses.”
“Our suppliers cited supply chain issues, with extended lead times and 30-100% inflation in cost of materials, labor and transportation costs. We needed to find solutions to truly protect our buyers. We connect with each customer personally. to discuss personalized solutions to help each move forward with their purchase. We have partnered with alternative lenders to help our buyers requalify, also with extended capped rates to further protect them from future interest rate increases.
“This decision has been extremely difficult and we sincerely apologize to all of our Nautical customers,” Adi said.
Complaints about developers changing prices despite signing contracts with buyers have caught the attention of Queen’s Park. Ontario Minister of Government and Consumer Services Ross Romano said in March that price increases were being considered.
“We’re not going to tolerate these types of bad faith and unethical practices from developers. They can’t just unilaterally change contract terms and prices, and that won’t be allowed,” Romano said.
Other developments in Ontario have also raised prices for signed agreements blaming inflation, rising construction costs and supply chain issues. Romano said builders who cancel resale deals at higher prices could face fines or lose their license.
Ramsey and Sharawat said the province must take action to force the developer to honor its original contracts to protect them and future buyers of developments in Ontario.