Some Ontario builders are giving pre-construction homebuyers 2 choices — pay more or forget it

Dozens of would-be homebuyers who've invested in pre-construction units across southern Ontario say developers are trying to charge them more money in a move that, for some, hurts their chances of ever owning a home.

Citing insurmountable delays and construction costs related to the pandemic, several developers have cancelled sales agreements, then offered the same buyers a chance to pay tens of thousands of dollars more for the same units, the potential purchasers told CBC News.

Some who decided to walk away with their deposits said developers then relisted the units at higher prices. 

After CBC News reported last month that Pace Developments cancelled several years-long agreements in Barrie, buyers reached out about similar situations in the Ontario municipalities of Guelph, Richmond Hill, Collingwood and Georgina, near Newmarket.

In Tillsonburg, Ont., about 60 kilometres southeast of London, 11 buyers are fighting to buy their units for the original agreed-upon price by taking developer Green Urban People to court. 

Among them are newlyweds Lucas Berthault and Erin Gardner, who've been living separately with their parents and are hoping to move into their fully built townhouse next year.

They made the purchase in the fall of 2020 after watching houses in their area sell for as much as 50 per cent over asking, Berthault said.

"We were like, 'You know what? Let's go into a new build,'" he said. "You don't have a bidding war. All you have to do is be patient."

They paid a $38,000 deposit for a unit from Green Urban People priced at $379,000, according to court documents filed with the Ontario Superior Court of Justice. Up until May, they were repeatedly reassured by a sales representative that it would continue.

But in June, the developer sent a letter to buyers saying due to permit delays with the township, it had terminated their agreements. However, the letter said, they could enter a new sales agreement if they paid an additional 25 per cent more — in Berthault and Gardner's case, that was $95,000. 

"It was like hope was lost," said Berthault. "It just felt like a greedy move." 

Oxford County, which includes Tillsonburg, disputes the developer's claims. Senior planner Eric Gilbert said the county has been processing applications "expeditiously" throughout the pandemic and all of Green Urban's files were approved within normal time frames.

Berthault and the other buyers are asking the court to order the developer to honour its original sales agreements.

The case will likely go to arbitration next year, Berthault said.