What Does This Mean for Vancouver Pre-sales?
February 28th, 2008 Categories: Real Estate Definitions, Vancouver Real Estate
Rising construction costs are affecting Developer’s ability to complete pre-sale condo buildings.
A few days ago it was Mount Pleasant’s Sophia, now it’s Chandler Developments (fortunately no relation to me!) H&H and their Garden City Richmond project have gone into receivership. So reports the CBC. Both projects were schedule for completion end of June.
The company was running into cost overruns, they were running out of cash and I think the lenders wanted to complete the project,” said Bowra Group President David Bowra.
“But they weren’t convinced it could be completed without the assistance of a third party. So they decided to apply for a receiver to be appointed.”
The receiver has discovered that 23 condos in the Chandler Development Group projects were allegedly sold to insiders at prices well below market value, Bowra said. So they may get to keep their condos, but will likely have to pay today’s prices. How many developers do you think do this?
Apparently there is enough money to finish the job, so the other buyers will get their condos without paying more.
The company was running into cost overruns, they were running out of cash and I think the lenders wanted to complete the project,” said Bowra Group President David Bowra.
“But they weren’t convinced it could be completed without the assistance of a third party. So they decided to apply for a receiver to be appointed.”
The receiver has discovered that 23 condos in the Chandler Development Group projects were allegedly sold to insiders at prices well below market value, Bowra said.
They may get to keep their condos, but will likely have to pay today’s prices, he said.
The Financial Institutions Commission of B.C. published an article on pre-sales in August 2007. Read it here http://www.yattersmatters.com
What do you think causes this problem? How do you think it can be solved? Does this effect your purchase of a pre-sale? Or an assignment?
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