Why this Canadian couple walked away from $140K after dispute with home developer 

This is Cana duh we’re talking about, not the United States! Do you really expect any better? 🙄

⁠@@747-pilotHey doofus, you know builders screw over hard working Americans also, right? It’s not a “Cana-duh” thing 🤦‍♂️. We have the same sleezeballs here.

@@747-pilot Don't be so hateful on Canada.

why not look at the fool running it. guys a moron i work for all kinds of builders and alot are doing this.@@rebeccahenderson7761

You actually believe Ameriduh is any better than Canaduh? hahahaha@@747-pilot

Those laws are in place, they didn't read or understand the sales agreement

WTF,, Fusion is an Asia owned company ,, these immigrants need to be fined , and deported out of the country ,,, sounds like in this case ,, The Lawyers were in on the scheme ,

the builder didn't do anything nasty, that's why the couple said it was not the builders fault. They purchased the house for a certain price, the market dropped out from under them, and the bank likely wouldn't finance the full purchase price because the house isn't worth that much. If they didn't walk away, they would have owed the difference between what the bank was willing to finance, and what the purchase price was. It could have been another 300K that the couple didn't have. Either way, they are lucky the builder was nice enough to just take the down payment and sell the house for current market value and probably not lose their shirts so to speak, which is why they were willing to let them off the hook for potentially hundreds of thousands of dollars that they still owed the builder. It's not just new builds, anyone at any time can buy a house and the market can collapse before posession, a lot can happen in real estate in 90 days. The bank at the last minute might say "oh we said we would lend 500,000 to mortgage this house, but now it's only worth 350,000. We will not give you the other 150,000 because a 350,000 house is not enough collateral for a 500,000 loan"

@@daxlarsen2121 So, was it the developer or the condo corporation who hiked the maintenance and occupancy fees? If the house was devalued because the bottom dropped out of the market, shouldn't those fees be lessened rather than increased?

When you invest in real estate, there is always the risk that property values will fall. Especially if you buy when prices are at historical highs.

This is happening everywhere in Canada as appraisal value of house comes low then the price they bought the house from builder.

I think they should have lawyered up. If the contract is misleading you can still sue. Sounds like a cash flow issue

@@scottolson5498but they had a lawyer it sounded like from the video

​@lililinda6947 If this is so. Hopefully, the lawyer has professional liability insurance. Always check your lawyer out by asking for a certain document.

If your stupid enough to buy property in a country with weak laws no rights and justice then you kinda deserve it. Its set up this way for a reason, so you lose.

got that right

Welcome to Ford the cons Ontario. Life is always more miserable and expensive under conservative govts@bbbj6583

Just look at downtown Toronto. Nothing remotely related to careful planning, but pure greed.

@bbbj6583 Cry harder Northern MAGAt.

Ever heard of buyers beware?

For $140K they could have built their own home.

@@Chicago48 assuming they had the land to build on : then there’s the well, septic , lot levies building permits etc.

@@ladyluck5248 A better point probably would be for $140K they could have built a tiny home or put a big down payment on a real home. Yea, *I WISH* I could build a real home for $140K but in theory you could if everything in the world was just perfect for it.

​​@@Chicago48how true. And also have a bigger house and a smaller mortgage

no they didn't , why do you think the builder can sue these two morons. They didn't read the fine print. Giddy up consumers I call them.. typical debt slaves. Notice how they didn't mention they didn't even make that 140 grand.. it was a bank loan. So now it just piles on their already mortgaged lives. You know that guy drives an $80,000 truck he doesn't own.

Occupancy fees pay for local property taxes and electric/hydro bills. 5k does sound outlandish, but, it doesn't go to nothing. Essentially, once they would've moved in, the city wouldn't send them bills from previous months because the builder would have to pay them. Something must've gone wrong with city hall if they were asking for well over 5k/month.

@@JayeAye-t7o 40k/6 month for property taxes/bills doesn't sound right. What else is in the occupancy fees?

@@JayeAye-t7ooccupancy fee not only consist of city’s charge and maintenance fees, it primarily made of mortgage interest of unpaid home value. Since the mortgage rate has skyrocketed, the interest amount for the unpaid money also jump. Nonetheless, the initially assessment of city’s property tax is outrageous. I have heard someone’s two bed room condo be assessed valued more than millions and got charged accordingly, you can always get reimbursed from the builder after you got your proper tax slips for the difference though.

How can they have Hydro bills before they even move in. Sounds like more purchase and or builder regulation is needed.@@JayeAye-t7o

I think it has to do with the increase of interest rate between 2022 and now @@JayeAye-t7o

Canada has tons of laws they need to start respecting and enforcing them

Welcome to Ford the cons Ontario. Life is always more miserable and expensive under conservative govts

@@Mr.chickensoup wouldn’t the lawyers know these laws?

@@JenuinI’ve had horrible luck with lawyers. It seems like they want to charge the most money for the least work, but there’s no end to it. You pay them $4000 retainer, but it’s all gone in no time in fees. $120 for a letter that took 5 minutes to write. $600 for a half hour phone call. Anyway, my guess is their lawyer failed to explain their exposure to fee increases prior to signing.

SEE ABOVE. (alter the calibre to suit your requirements.)

Stellar advice!!

$140K is insane. They could have taken that down payment and BUILT their own TINY HOME.

although better, essentially your lawyer can do nothing. The contracts are designed to favor the builder. It's a sad situation indeed.

Even better. If you find a property for sale by the home owners, you can hire a barrister and save even more money. Realtors fees add up to tens of thousands of dollars depending on the price of the house. A barrister will cost only a fraction of that.

ur own lawyercan,t be trusted either i have found , they are slopy don,t really stand up for your interests

Yep... even the lawyers are playing for the wrong side these days.

WTF,, Fusion is an Asia owned company ,, these immigrants need to be fined , and deported out of the country ,,, sounds like in this case ,, The Lawyers were in on the scheme ,

them realtors willl say housing ONLY GOES UPPP UPP AND UPPPPPP

@@gregjsinclair If it is Asian owned, it's likely the owners are not in Canada at all. The local action will be handled by a "management company".

lol! You meant to say Canada is a corrupt shithole

Wise advice.

In a to-be condo corp anyway.

@@djayjpUnless you are the one building your own anyway. Quite the warning to anyone thinking of going this route.

Way things are going I may never own a home. That being said, the way suddenly about 20 years ago homes under construction suddenly had chip board walls kinda makes me not want one.

@@aidenschvatkok5732 So buy one that was build before that time, I would agree that the quality of building materials has gotten worse during the last 20 years, especially wood.

Any chance you can define "contributing members of society"?

If you make more than 100k/year, you're a contributing member, duh.

@@El-Dorado930 I see you put a financial price on being a contributing member of society. You are so wrong.

@@johnwattdotca I was being sarcastic...

​@@johnwattdotcaof you pay more tax yiu are definitely contributing more.

Facts!

Yup. All you’re doing is buying a promise from someone you don’t know someone who doesn’t care about you.

Further: Do not buy before 'inspection' by an independent expert and city/state/ 'registration' including a a clear-cut, waffle-free WARRANTY for(say) FORTY YEARS. (ANY other business offers a comprehensive warranty: even solar-panel producers offer 30 years). Bottom line: MAKE IT PERSONAL!

We did. It’s ok if done right

The lesson is: leave Canada. It sucks.

So the builder should take the loss? Why?

@@MrWookie1981 Exactly. Builders didn't devalue the property, the market did. The builders lowered the price to sell the remaining units. They signed a contract for a certain price and the value usually goes up but they were caught and the value went down. It's not on the builder to "price match" on contracts if the value goes down.

@@MrWookie1981 The builders can write off losses and absorb them. Builders are usually corporations so that is rarely, if ever affects their personal financial status. There has to be more equitable laws for both sides. The builder will still sell the home and most likely will still make a profit.

@@cavelleardiel And you know this...how? My sons' father-in-law is a self employed house builder and if you really believe that every house is always sold at a profit anywhere and at any time no matter what the market is at the time of sale then you don't understand how the free market works in practice. Fact is that the builder who puts up the money to build the house runs a huge risk that the market will turn against him and that loss needs to be paid for out of the profit made by selling an x amount of other houses. "The builder can write off losses and absorb them", clearly you have never been involved in house construction.

@@freddexta3363 A builder should not be able to walk away with a 150,000.00 deposit. A percentage that is reasonable is acceptable.

Yes , it's refreshing to see anybody remain this calm after being fleeced for 140k . They accepted the consequences and walked away . No yelling , no screaming about how unfair life is or how corrupt the system is . They just wanted to make light of what happened to them so that everyone else is aware of this builder's tactics .

what tactics?@@randoir1863

So true! I can’t imagine getting scammed for 140k and be that calm and logical about it.

I am not sure if you're being sarcastic. and why remaining calm matters at all. @@randoir1863

The lawyer's job is just to explain the contract. The client is still responsible for deciding whether or not to sign it, and accepting the risks of real estate investment if they do.

@@bartholomewcubbins9723 Lawyers job is getting your money

@@bartholomewcubbins9723 Lawyers job is to advise. When I bought my house, the lawyer explicitly said "You need to amend the contract and put caps on these couple of fees. They won't necessarily agree, but it could harm you in rare cases"

It does if you paid attention or if you went and read the story

@@jumbome7420 where did the reporter explain how a 200k drop in value doesn't mean the down payment is worth more on a %? Excuse me that IS his job. It's so bad I wouldn't waste my time reading anything that writes.

Home was devalued as in it was bought for $1M, then by the time it was ready to be closed, its value was $800k (because housing market is down right now). So they are to buy something worth 800k for 1M. So the bank will approve loan for 800k-140k, and they will need to make another 200k payment to get to 1M they promised the builder. Basically a case of crappy luck that they bought at the peak.

@@MarkFreemanYVR whatever that's supposed to mean?

@@davidmcnamara8024@DisturbedRocks explained it well. Do you understand it now?

Not really, they are probably taking losses as well. Why else are they selling houses for 200k less than before?

@@TheChangNetwork Another simpleton!! They're selling houses for $200k less than before because they were OVERPRICED by $800k 'before'. I'm in Australia, and can build a decent 'Familiy Home for under $20k. (sic)

Oh no...Fusion is a fairly big builder in Southern Ontario...Guelph, Kitchener, Cambridge... I'm so glad this is out there....

I'd trust a small group of builders before a large company. There are far more crooks in suits.

Wise advice. Track record matters because pre-builds come with a lot of risk (which is why you buy at a "discount").

@@shrimpy7862 Exactly, it's the predatory mega corps you have to look out for.

Have to sue them which is an expensive proposition after losing all that money.

Why does everyone think the developer is to blame. They said they were lucky - because the developer didn't sue them for his losses due to them backing out of the sale. They gambled on the market and lost.

​@@TheTruth-cg8vjwhat losses though?

@@TheTruth-cg8vj Just because it's not illegal doesn't mean it's not unethical. They wanted to back out of the sale because they found the updated terms to be unreasonable and they didn't know how long they would have to pay occupancy fees for. They consider themselves lucky because the developer accepted the agreement meaning they no longer have to deal with this mess. This has nothing to do with gambling on the market. This is the developer behaving badly.

@@ktktktktktktkt There were no updated terms. They're just no longer happy with the original terms they agreed to a year ago. And of course, no one would be happy if they bought near the peak of the market and then the home's value dropped by over $200k. But they were lucky they could cut that $200k+ loss down to $140k.

Cant all of these hardships be avoided with a little research beforehand? Its just an assumption. I have no idea.

@@johndor7793 The problem is if the construction is delayed the occupancy costs often are used to cover the loan the builder took out to cover the construction costs while he gets the time, materials and resources to finish the construction. Under normal circumstances, you would have taken possession and then your mortgage would have paid the builder for the house. but if the house is delayed the builder still has to pay his loan and without the mortgage money, there is no cash to pay it. Some larger developers cross-finance projects spending money from one project to pay the loan on another. That can often collapse and leave both projects in trouble.

Ya. Looking back on how I phrased the question feels kind of dumb on my part.

They most likely ran out of money. Probably don't have financing from bank at these rates anymore either.

It's a difference between money now, and money you already spent. While they did already put down $140K in the past, they may not be in the position to pay the ~$6,000/month as things currently stand, especially with no clarity on when those payments will end.

agreed. even I am confused as to why they walked away and they are saying the builder is also not to be blamed for this

They said there is no end date for occupancy fee, that means they will pay that for ever????

@@nb1638yes I have a house you can pay me forever for …

awesome, had a friend do the same.

I would buy a maintained older house. I don't like dealing with crooks.

What rights? Please don’t tell me you’re talking about masks or vaccines. This is squarely on predatory developers and no protection for buyers.

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it's because interest rates in 2013 are different than in 2023.

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Typically you see these when a build is delayed for some reason beyond it original occupancy date and represents the amount the builder is paying to the bank on the load they took to build the house. At least that is what it is supposed to be for. Its called an occupancy fee because you were expected to have occupied the house during that time but are unable to due to a delay in the construction. The money doesn't go straight into the developer's pocket, it actually is going to pay the load the developer took to pay for that house that he is unable to pay since he didn't receive the mortgage money because of the delay and you not being able to occupy the house.

Excellent thought. Faced with that situation, you beg, borrow and steal (not literally) the money to close and then re-assess your options.

The story is basically misinformation. The buyers want to get out of the contract they already agreed to. The builder wanted the contract to continue and for the buyers to pay the price they agreed to. The buyers walked away and breached the contract, so they forfeit the deposit.

Yup. Faced with this situation you beg, borrow and steal (not literally) to close. Then you re-assess. Instead the chose to forfeit $140,000 and then run the risk of being sued later if the sale price is less than the sale price to this couple.

@@John_IIThey cannot be sued by the developer.

Yes, you do. It's in the contract. The wise choice is to not buy a pre-build.

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Tho "occupancy fee" was monthly rent to builder until they 'finished' building the house. Whatever that means.

Yes.

I think that's why they were careful to add in the story that they thought the builder "did nothing illegal".

There’s nothing fusion homes can sue about. The buyers can prove their claims.

Yeah, try to rent instead at 2200$ per month... Just 26 000$ down the drain per year when my mortgage + taxes don't even amount for 7000$...

Interest rates are high in comparison to recent years, I paid off my home in 2000 and the interest rate was 12.99%.

You must be younger. 6-8% isn’t terribly outrageous. A 1-2% mortgage is not realistic. My parents bought a home in the early 1980s at 16%. I too got used to super low interest rates but those damage the market long term just as very high interest rates do.

AND GOIG TO 12%

Yup... high prices + high interest is not the environment you want to be buying in. Wait for low interest or lower prices... I won't pretend we'll ever get both.

Welcome to Ford the cons Ontario. Life is always more miserable and expensive under conservative govts

They are out $140k. But technically saved $60k. Should the title say that?

Oh yeah. The news here is basically misinformation.

@@Turningthecurve yeah and you shouldn't have to pay until you have a complete product. If it is still under construction then it should be a construction or builders cost.

insurance for WHAT??? a bad contract??

You mean special assessment insurance.

This stinks of low cash flow. Dude. You gotta learn your rights.

Insurance companies crooks too

Occupancy fee has nothing to do with interest rate, it's the fee one pays for occupying a new construction while the management does paperwork, registration etc and gets you the final title for the property. You keep paying this fee to the management in the interim until you get title and the mortgage starts.

@@MM-hw6fz It has everything to do with interest rates. The builder is leveraged and needs the increased fees to cover the interest expense they are carrying until the deal closes (condo corp created) and they get their money to pay of the building loan.

Excellent thought. Faced with that situation, you beg, borrow and steal (not literally) the money to close and then re-assess your options.

They could have averaged down and bought more units after the price drop but they didn't have that kind of money.

Don't assume the market will get hot again. Too many macroeconomic factors that will prevent this

They also usually -own- know a few politicians to help them with zoning laws, tax incentives, etc... Notice how politicians feign concern for their voters, but nothing ever seems to get done to stop corruption? It’s everywhere now, and seems to have gotten a lot worse in the last decade.