From rooftop pools to yoga studios, condo developers across Canada are doubling down on amenities to stand out in a crowded market. But are buyers really choosing homes based on the extras?

Taylor Musseau, partner at MLA Okanagan, said amenities help round out the lifestyle pitch for Stober Group’s new two-building development in Kelowna, where she is handling sales and marketing.

The development dubbed Movala, in Kelowna’s sought-after South Pandosy area, includes nearly an acre of shared spaces. Residents will have access to a pool, hot tub, al fresco dining areas, gardens, a gym, yoga room, cabanas, a bocce ball lawn, games room, guest suite and an indoor “great room” designed for entertaining. 

“It’s tailored to four-seasons living here,” Musseau said.

The two-building project totals 325 homes, with the first now welcoming residents and the second set to be completed next year. Musseau said building one is nearly sold out.

An outdoor dining area at Movala (photo: Stober Group)

Beyond the amenities, Movala’s draw is rooted in a mix of design, price and location. 

The development sits near a popular Okanagan beach. One-bedrooms start in the mid-$400,000s, while two-bed, two-bath homes are priced around $580,000, figures Musseau describes as “good value” for comparable constructions in the area.

She said the extra amenities haven’t added a lot of extra expense for residents because the costs are spread out amongst so many homeowners, noting fees come in at just under 50 cents a square foot.

After an initial marketing push targeting empty nesters and downsizers, the team has shifted its focus to younger buyers and families. 

“We’re looking more at young professionals, young couples, people who want to live here full-time,” she said.

Can buyers have it all right now?

Condo buyers in Vancouver are sitting in a strong position, said Adil Dinani of Royal LePage West Real Estate Services. 

“We’re in a buyer’s market for most segments right now, especially condominiums,” he said. “Buyers have selection and they have time. It’s a very unique time in the market. We haven’t seen the stars align like this since pre-COVID.”

With roughly 17,000 active listings in Greater Vancouver, and about 40 per cent of them condos, buyers can afford to be choosy.

Price and location still drive decisions, Dinani said, but amenities are becoming a bigger part of the conversation.

“The amenity offering is important,” he notes, pointing to demand from active baby boomers looking for fitness facilities, pools and saunas in their buildings.

But while the lifestyle features attract attention, they also come with higher costs. “You might have a 1,200-square-foot two-bedroom and your maintenance fees could be almost 80 or 90 cents per square foot,” he said, which would total about $900 a month.

He adds that while some residents love the idea of a saltwater pool or concierge, he has learned that not everyone capitalizes on the amenities in their buildings after they move in.

Sometimes, it’s simple things like air conditioning that drive demand, he said.

“A lot of older buildings, even those built as recently as 2015, don’t have A/C,” Dinani said. “Now it’s near the top of buyers’ lists.”

Community as an offering

Jeff Brown, executive vice president of NorthStar Development, is behind an up-and-coming project in his hometown of Port Coquitlam.

NorthStar took the project over from a previous developer who had completed the basement level, and has redesigned the building to match today’s market demands, said Brown.

Wellness and social living is at the heart of the concept for the 102-unit project called Livy.

“The desire for community is something that’s been growing, particularly post-2020, when we were all isolated,” said Brown. “There’s a growing expectation, we feel, for a curated lifestyle, which offers wellness and shared spaces that foster connection and could lead you to meet your neighbours.”

The vision for the golf simulator at Livy.

Livy’s design features more than 10,000 square feet of amenities, including an expansive rooftop space, a virtual golf simulator and high-tech wellness areas. Among the most alluring features is a Nordic-style spa with hot and cold plunges.

He said their target is first-time buyers. Junior one-bedroom units are priced at $389,000 and range up to $739,900 for two-bedroom plus den units, according to Livy’s website.

Brown said an expertly-drafted design helped offset the costs of the “extras” for residents. The spa, he said, adds an extra six cents a month to the average condo fee.

“We were able to put our heads together and execute without spending frivolously,” he said. “There’s a bit of an art to it.”

Courtney Zwicker

Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.

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QUICK HITS

• The developer’s attempt to add nearly $60,000 in extra fees beyond the APS terms was determined to be a breach of contract.
• Courts ruled that sellers must provide clear documentation and justification for any additional charges listed in statements of adjustments.
• Because the seller breached the APS, buyers were entitled to recover their deposit and upgrade payments
• Because the buyers took possession of the property for at least a year, the buyers were found responsible for paying fees totalling $68,000 to compensate the seller for the time they lived there.

In litigation arising from disputed real estate transactions, courts are frequently confronted with circumstances where a buyer tries to close for less than the agreed sale price.

In many cases where a buyer tries to close for less than the price agreed to by the parties, the buyer is the party in default, and the seller is entitled to retain the deposit paid in addition to seeking other damages from the buyer.

In some cases, however, a failure to close may be due to additional unanticipated charges imposed by the seller on top of the original agreed-upon price. A seller’s demand for more than the agreed purchase price is just as much a default as a buyer’s demand to pay less. Whether or not such charges are permitted is generally determined by the wording of the Agreement of Purchase and Sale (APS) between the parties.

Taheripouresfahani v. Dormer Bond Inc., 2025 ONSC 5833 (CanLII) arose from a dispute between the buyers and the developer/seller of a newly built property in Richmond Hill, Ont.

The purchase and disputed charges

In 2020, the buyers entered into an APS with the developer for the purchase of the property for $761,490. The buyers paid installments of more than $114,000 as a deposit and $11,540 for additional upgrades. The final closing date was to be designated by the developer’s lawyer upon at least 14 days’ notice.

Pursuant to the terms of the APS, the buyers were allowed to move into the property before the final closing date once occupancy was permitted. In April 2023, the buyers moved into the property as permitted and began to make monthly occupancy payments of $3,782.

On July 31, 2023, the developer delivered a notice scheduling the closing date of Sept. 15, 2023.

On Sept. 7, 2023, the developer delivered a Statement of Adjustments to the buyers’ lawyer, which included additional charges totaling almost $60,000. The charges were stated to be for:

• Development charges/increased levies: $8,000 plus HST
• Meters (hydro/gas): $8,163 plus HST
• Vendor’s legal and administrative fees: $8,605 plus HST
• Alternative materials cost: $27,021.08 plus HST

A flurry of correspondence ensued between the lawyers over whether or not the charges were permitted under the APS. The developer offered to reduce some of the charges but demanded a mutual release in return. The buyers refused and demanded that all the additional charges be removed. The transaction was not completed by the Sept. 15, 2023 closing date, but the lawyers continued to exchange correspondence in the following days concerning the statement of adjustments and additional charges.

On Sept. 26, 2023, the developer’s lawyer confirmed that the transaction had been terminated. The developer demanded that the buyers vacate the property.

Court finds sellers in breach

Litigation ensued, with each party moving for summary judgment.

The motion judge noted that a buyer is generally entitled to proof of figures contained in a statement of adjustments: Bellisario et al v. 2200 Bromsgrove Development Inc., 2025 ONSC 2546, at paragraph 61.

The motion judge further noted that the APS specifically stated that the balance due on closing would be adjusted to include “any development, education, park or other levies or imposed charges or taxes by Government Authority”. Accordingly, while the development charge of $8,000 was potentially allowed by the APS, the developer had an obligation to explain how the charge was calculated. The developer had failed to provide any evidence to substantiate the charge, referring only to an unexplained “formula” used by the municipality.

Further, while the APS permitted adjustments for the cost of hydro and gas meter installation, the developer did not provide any documents to the buyers or the court on the motion to demonstrate how the amounts were determined.

A similar issue arose regarding the legal and administrative fees. While the APS provided such fees to be added to the statement of adjustments under specific conditions relating to NSF or “stop-payment” cheques, these did not apply in this case.

Lastly, the motion judge found that none of the “alternative materials cost” charges were provided for in the APS and that there was no evidence to support the amount charged by the developer.

The motion judge concluded that it was not the buyers who breached the APS but the developer who tried to close for more than the agreed-upon price in the APS by adding approximately $60,000 in charges that were either unjustified or not authorized. The developer’s attempt to claim any one of these charges was a violation of the APS.

As a matter of law, the motion judge determined that the demand for additional payment as a condition of closing was an anticipatory breach of contract based on the principles discussed by the Court of Appeal for Ontario in Spirent Communications of Ottawa Limited v. Quake Technologies (Canada) Inc., 2008 ONCA 92, at paragraph 37.

The motion judge decided that buyers were therefore entitled to the return of their deposit and amounts paid for upgrades to the property.

Buyer’s occupancy and financial responsibility

While that result would have ordinarily been determinative of the dispute, the case was unusual due to the fact that the buyers had taken possession of the property in April 2023 and resided in it for at least a year thereafter. By the time of the hearing in 2025, they still had furniture in the property and continued to pay for internet and security cameras. The buyers also refused to consent to an order of possession in favour of the developer. The motion judge found the buyers’ refusal to pay the developer for their possession of the property to be an untenable position.

In the result, therefore, the buyers were found to be responsible for the monthly occupancy of $3,782 up to the date of the decision in October 2025 (totaling $68,076), as well as for reimbursement of property taxes of $6,586.56 paid by the developer during that period and unpaid condominium fees of $3,882.

Costs of the litigation based on the divided success of the summary judgment motions are to be determined.

The decision demonstrates that sellers seeking to impose additional charges on the agreed-upon purchase price will need to ground such charges in the specific terms of the APS and have an obligation to provide satisfactory back-up documentation to substantiate the charges. Buyers who take possession of a property before closing should be prepared to compensate a seller for their time in possession of the property before it is re-sold to another buyer.

James R.G. Cook

James Cook is a partner at Gardiner Roberts in Toronto and has been with the firm since he articled there in 2002. As a litigator in the firm’s Dispute Resolution Group, he has experience in a broad range of commercial, real estate and professional liability litigation. Phone 416-865-6628; email jcook@grllp.com. This article is provided for educational purposes only and does not necessarily reflect the views of Gardiner Roberts LLP.

The post Buyers win after developer tries to up the price by $60,000 at closing appeared first on REM.

The shadow market consists of both presale condo units that are available before the building has been constructed, and the units that are leftover from the presale period but are still not listed on the MLS.

“(Presale inventory) doesn’t get picked up in the real estate boards’ monthly analysis,” Vancouver Realtor Steve Saretsky told Real Estate Magazine. “There’s never any discussion that the preconstruction market also has all-time record high inventory, and none of that gets tracked publicly.”

He said that the large amount of shadow inventory is putting more pressure on prices and is straining developers, and predicts housing starts will continue to fall off aggressively since developers aren’t selling the inventory they already have. 

This is a fairly new phenomenon, according to Saretsky, because condos used to sell out very quickly in the presale period due to a strong bull market and the presence of investors. Now, investors have fled the market, and most buyers are end users who are less interested in the small condos on offer, meaning many developers can’t sell all their units before the building is complete and are left with shadow inventory.

“(The shadow market has) never really been a conversation,” Saretsky said. “I think it matters.”

Developers holding back inventory

Toronto Realtor Tom Storey told REM that typically a developer won’t list their inventory on the MLS because they don’t want to overwhelm the market and compete with themselves, or make previous buyers aware that they’re now offering a discounted price on their units. Instead, they’ll list just a handful of units so buyers know they exist, but often buyers will have to find out about the full extent of shadow inventory through their Realtor.

The problem is that this glut of presale inventory hasn’t been competitive with the already extensive amount of resale inventory on the market due to its higher price, according to Saretsky and Storey.

That makes the shadow inventory a hard sell for developers,, and some have had to offer big discounts to get it moving.

Storey said there was a one-day flash sale in Surrey, B.C., where the developer of one building took 25 per cent off all of their remaining inventory, and it sold out in one day. Even with the new Liberal federal government axing the GST for first-time homebuyers, resale condos are still cheaper and attracting most of the buyers, according to Storey.

Storey said much of the shadow inventory skews to more luxurious, large units that may appeal to downsizers who can wait a few years before moving in, rather than more budget-minded buyers who usually want a place that is move-in ready immediately.

He estimated based on data from Urbanation that there are roughly 2,500 shadow inventory units in the GTA that are not listed on the MLS, compared to about 7,000 listed resale units.

“It’s nowhere near the MLS numbers, but it’s not nothing,” Storey said. “It’s building.”

Market pressures forcing new sales tactics

Vancouver Realtor Hasan Juma told REM that his city will likely have 3,500 shadow inventory units by the end of 2025, compared to about 10,000 unsold resale listings. That’s according to data from real estate agency Rennie.

He said that developers may begin to change their sales habits due to growing shadow inventory. Typically, they might try to sell up to 70 per cent of their units in presale to secure funding to build, then try to sell the rest later at a higher price. Now that they’re not selling those leftover units, they may not be as willing to keep them for later as they have been before.

“A lot of developers have been burned in that process,” Juma said. “It’s probably going to change how they do that moving forward.”

Juma said that a lot of resale inventory now has barely been lived in, so shadow inventory has a hard time competing with it given its main advantage is it is new.

In all, the Realtors say that shadow inventory only exacerbates the current condo crisis, though Juma noted that most industry experts factor in shadow inventory when talking about the situation. 

“The general public … don’t know the full scope of how big and how great the amount of supply is,” Juma said. “Buyers have a good amount of options.”

Eric Stober

Eric Stober has over 10 years experience as a journalist and writer at publications big and small, including Global News, Toronto Life, Post City Magazine, Greencamp.com, the Toronto Star and The Grid.

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But as of late 2024, CMHC has tightened enforcement of one critical requirement for many projects under this program: the surety bond.

Surety bonds might seem like a behind-the-scenes technicality, but they have very real implications for the pace and certainty of new housing supply. 

Without them, MLI Select funding can be delayed or withdrawn, stalling projects midstream and keeping much-needed homes off the market. For real estate professionals, this can mean delayed closings, disrupted pre-construction sales and fewer new listings coming to market.

Under today’s framework, three distinct groups are feeling the impact: 

• Self-performing developers who manage and build their own projects, assuming all risk
• Developers and general contractors who need assurance on the bonds their contractors provide
• Specialty sub-trades who are now being asked for bonds, often for the first time on apartment projects under MLI Select.

For all three, the bonding process can be unfamiliar territory and demands a clear understanding of the surety market and industry expectations. 

From contractor-led bonding to broader obligations

Previously, CMHC did not enforce bonding on projects it supported. Now, whether the developer is building in-house or hiring a contractor, CMHC is enforcing this level of financial assurance for specific builds, usually over 25 units, but also subject to CMHC’s discretion. 

For self-performing developers, securing these bonds can be challenging. Market appetite is limited, and in a recent instance, only two companies offered terms to such developers. 

Developers hiring contractors face different considerations: reviewing bond wordings, confirming contractor eligibility and understanding the prequalification process are all important factors to consider.

The details matter. A prequalification letter issued by a bonding company carries weight; one on a broker’s letterhead alone may not. The information in these letters — from bond limits to length of relationship — helps determine whether a contractor can realistically provide the required bonds.

Barriers to qualifying

A surety bond is a form of third-party validation, signalling the bonded party has the financial capacity, experience and systems to complete the work. But many developers set up new corporations for each project, leaving the entity with limited assets and no operating history. In these cases, the only way forward may be to secure collateral mortgages on other properties to meet the surety provider’s requirements or provide additional guarantees.

Sub-trades face their own challenges. Many have never needed bonding before and must establish a bond facility from scratch to work on MLI Select projects. Early awareness of this requirement can prevent last-minute delays or lost opportunities.

The cost of non-compliance

Failing to meet bonding requirements can result in withheld funding, lost contracts and stalled projects; sometimes with millions of dollars already invested. These risks ultimately sit with the developer, making it essential to address bonding early in the project timeline.

Meeting these requirements is not simply a matter of paperwork. Success depends on how the developer’s financial position is presented, the security offered and the quality of supporting documentation. Solutions, such as leveraging collateral on other properties, can make a difference. The earlier these conversations happen, the more options are available.

A requirement worth planning for

MLI Select remains a powerful tool for delivering rental housing that meets Canada’s long-term needs. But the bonding requirement has raised the bar. 

Developers and sub-trades who integrate bonding into their project planning from the outset will be better positioned to secure financing and keep projects moving. Early engagement with a surety expert who understands the nuances of MLI Select can help navigate the process efficiently, avoid last-minute surprises and protect timelines.

Whether self-performing, hiring a contractor or requesting first time bonds from sub-trades, the message is clear: treat bonding as a core part of your financing strategy, not an afterthought.

Slava Kolmatskyy

Slava Kolmatskyy is Vice President, Surety at NFP Canada. With more than a decade of experience in surety and construction risk, he helps developers, contractors, and real estate professionals navigate complex bonding requirements and use bonding as a tool for growth.

Before joining NFP, Slava worked at Intact Financial Corporation and Petrela, Winter and Associates. At NFP, he has advanced through senior roles to his current position, advising on large-scale projects and programs such as CMHC’s MLI Select.

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They are designed that way. The APS has been drafted to anticipate all the builder’s needs, such as delays in obtaining occupancy permits and other government approvals, and to protect the builder’s overall best interests. Closing dates five years in the future are not uncommon.

These agreements are also usually quite lengthy, dense with legalese language and quite intimidating to initially glance over. Builders appear to have all the bargaining power and individual purchasers interested in new subdivisions or condominiums are seemingly at their whim.

But is that necessarily the case? The short answer is “sort of”, since not everything is up for negotiation.

For example, lot grading and water drainage is regulated (highly) by municipal bylaws. New buyers will not have much luck trying to negotiate changes to the slope of their yards. To get a building permit in the first place, developers usually must submit grading and drainage plans to the city that are designed by engineers. This is important to ensuring water flows away from building foundations to prevent damp basements and to ensure drainage does not negatively affect adjacent properties or the city’s infrastructure.

In my experience, however, certain other things in the agreement are up for grabs.

Capping development charges:

Often my clients ask to “cap” development charges and levies imposed by the municipality. Such charges could include parks levies, cash-in-lieu parkland dedication payments, education development charges or even public art contributions. At the end of the provision listing all such charges and levies, ideal phrasing would be something like: “the amount of the adjustment pursuant to this paragraph shall not exceed $[X] dollars plus applicable taxes.”

It is becoming more commonplace these days to see multiple paragraphs in the adjustments section of the APS that refer to development charges. Yet sometimes only one of these paragraphs has the development charges capped. For instance, I recently saw a cap implemented with respect to charges made pursuant to the Development Charges Act, the Education Act, the Planning Act or other legislation of a similar nature, but there was no cap for levies that may be assessed as a result of specific development agreements that the builder has entered into with the municipality.

In that case, I prepared a negotiation letter addressed to the builder’s lawyer, and we were successful in negotiating a cap for the second development charges paragraph as well. Otherwise, as initially drafted, the adjustment would have been determined at the builder’s discretion and the buyer would be bound to accept whatever amount the builder chose to apportion to the property.

Capping assignment fees:

Another part of the APS for which a cap is commonly negotiated is assignment fees. Assigning the APS to a new buyer (or assignee) is an attractive option for many of my clients, as they can make a profit for the increased market value of the property since they signed the APS (perhaps a couple of years ago) without having to take title to the property and pay expensive land transfer tax.

However, the APS may not allow an assignment at all as originally drafted. Moreover, listing the property on the MLS is usually strictly prohibited, as this could lead to decreased marketability for other units in the subdivision or condominium complex. Other prospective purchasers may, for instance, think there is something wrong with the pre-construction project upon seeing an MLS listing and become discouraged from buying in.

For this reason, the builder’s APS typically specifies that an MLS listing will be construed as a default under the agreement and could lead to the builder terminating the transaction, keeping all initial deposits as liquidated damages, and re-listing the property for sale to another third party (with the builder retaining the option of suing the original purchaser if the property is then sold at a much lower sale price).

To make sure all options are considered, I always ask my clients if they may be interested in assigning their APS down the road, and if they would like to negotiate a cap on assignment fees charged by the builder and the builder’s lawyer. Particularly given the fact that desires can change in five-year time periods, a client may decide to buy another resale property in the interim or choose to later invest in a different pre-construction project that appears more attractive in the long-term.

Such anti-assignment clauses usually prohibit leasing the property to tenants as well, which will be important to clients seeking to purchase investment properties. One should negotiate to at least allow assignments and leasing upon receiving the builder’s consent, and the wording of such clauses should be negotiated so that consent “shall not be unreasonably withheld” rather than being in the builder’s “sole and unfettered discretion”.

Caps can be negotiated for other items as well, such as for hydro and water meter fees and/or installations. In any case, given the long-term nature of the investment when buying into pre-construction projects, prospective buyers would be well-advised to consult with a lawyer during their 10-day cooling-off period after signing the APS to see if they can sweeten their deals.

Harjot Atwal

Harjot Atwal is a Mortgage Agent (Level 1) with Ontario Lending Solutions (FSRA #13063). He is also a real estate lawyer and has published articles for Law360 Canada, Real Estate Magazine, Canadian Lawyer Magazine, CondoVoice Magazine, and Suhaag Magazine. You can reach him via e-mail.

The post Reviewing a builder’s Agreement of Purchase and Sale appeared first on REM.

My background:

Real estate broker since 1983, graduate from University of Toronto Geography/Planning.

Real estate sales and marketing, eventually specializing in residential land acquisitions and new house construction. Opened Carriage House in 1993. Never looked back.

Began assisting developers and builders with permit applications, committee of adjustments, minor variance applications. Helped retain servicing contacts, trades and suppliers, including attending meetings at the town, region and various environmental authorities. Over the course of time you can’t help but build a network and experience. Some good, some not so good. Live and learn, fall down, get up, dust off and get back at it. Always for someone else.

Decision time, leap of faith:

Tired of watching from the sidelines. If I can do this for them, I can do it for myself. Have my son join me, get him to open a limited corporation online. Note: Let’s keep everything close to home, family only. Going to need some capital, but don’t want partners. Credit line, a little personal cash, new chequing account has $15,000 overdraft and two credit cards with $10,000 each. Let’s call this the OPM principle (other people’s money, mainly the bank).

The search:

Easier said than done. Property has to be inside a settlement boundary, sufficiently big enough to support development and most importantly have the right zoning. A property can be across the street. Without the zoning, forget it. Oh, and the price – your equation works backwards from what an ultimate buyer will pay for a house on a lot, in that specific location. After costs you will be left with a value you can afford to pay. Strictly business, no emotion.

Now a willing seller. Please note, being in the business there are open doors, or partially opened doors, and plenty of tools to search and capture. From MLS to registry office, reverse look-ups, corporation searches and of course good old-fashioned door knocking. Keep quiet, secrecy is key. There are people out there who will try and stop you or take the opportunity away.

Eureka:

Working on a project in a small settlement, I noticed a vacant lot. Check the zoning, yup it could work. With the existing bylaws it could yield four separate building lots. Fairly good location, municipal water, natural gas, telephone, hydro, but no sanitary (individual septic), storm water to the ditches on the street. Only problem: it’s not on MLS or for sale. Get to work and go door knocking.

Contacted one of the two owners. Being a broker, full disclosure from the very beginning is/was an absolute must. W5: who, what, where, when and why. All up front, this is what I want to do. They were willing, but the price…they want $600,000 I’m figuring top-end $450,000. We were both dreaming, but they less so than I.

The Contract:

Asking: $600,000. Offer: $450,000

Agreement: $575,000, no commission

$125,000 down payment, VTB one-year interest only, quarterly payments, conditional for 60 days on due diligence, closing 30 days after due diligence. This better work.

Due diligence:

Already know most of the zoning bylaws, setbacks, etc., but need a preliminary meeting at the town with concept plan in hand. Check with the region while waiting for pre-lim at the town, check for environmental concerns, utilities and availability, get surveyor and engineer ready, speak to a couple of builders to see if there is any interest, even potential homebuyers. Tedious, but not a tremendous amount of effort.

Pre-lim reveals a kick in the gut. You can go through variance process for three lots, but if you want the fourth, it’s a full-scale plan of subdivision. That’s at least $350,000 as opposed to $50,000 and a minimum two years (if you’re lucky). The numbers change, a lot, but it still looks good. Base everything on three lots, fire the starter’s pistol at the surveyor/engineer and get this on the town docket ASAP. The list of conditions from the town to get the severance is not onerous but I’ve only got 60 days, the town is not lenient, miss a cut off and it’s another 30 days.

List of conditions:

You can do this completely on your own or hire people. My suggestion is, get your hands dirty and do the work you can. There will be an appreciation later that only experience can provide.

Start checking off the boxes, from a full site plan showing building envelope, setbacks, driveway, etc. to a full landscape plan showing drainage, septic location etc. It’s basically three surveys built into one. Snag: there’s a minimum frontage that can’t be met on a lot because of the “daylight triangle”. The solution is to add a minor variance application into the mix as part of the entire application.

Concurrently clean the site, get an appraisal based on what a building lot would sell for times three (park dedication fees to be paid, five per cent of the appraised value), signs to go up, lots of running around. Snag 2: delays in obtaining site plan and landscape plan from the surveyor cause a missed deadline. Now 30 days behind. Ask for an extension from the seller. If he says no it’s a gamble. Obtain the extension, book the date with the town.

Council meeting:

Part of the process includes informing all local residents and allowing their input. Several documents sent in from concerned residents who object to the application(s). During the meeting there was an agitated neighbour fiercely trying to block the motion. Fortunately, the town does not accept ideas that you don’t want or like development, not in my backyard. If the development adheres to planning policy and building code guidelines, objections fall on deaf ears.

However, if an individual wishes to delay and obstruct, they can appeal to the Ontario Municipal Board. Council unanimously approves the Consent Application and Minor Variance, subject to a 20-day appeal period. It can be quite stressful waiting for that last day as objection or appeal can be right up to close of business on the 20th day. Fortunately, luckily as well, no appeals. Contact seller, waive conditions, contact solicitor and instruct him to get ready to close.

In the background, I have leaked out to builders and agents that there will be three building lots available shortly. Good interest, but the price…. everybody wants a deal. Don’t panic. Tell yourself that every morning.

The negotiation: On MLS for $339,900 each, receive multiple offers over 10 days. Was prepared to take anything over $300,000. The best offer (based on money, closing, commission, conditions) came in at $315,000. I countered at $325,000 with this kick; I will give a VTB for 50 per cent of the value, principal-only payments of $1,500 per month (each lot) for one year. Blinded by the notion of a no-interest mortgage, I gained $30,000, but had to wait 12 months to fully cash in.

Timing:

As previously mentioned, finding the right property can take weeks to years. For our purposes we will start from the date of investigation, July 2015. Two weeks to track down, meet with seller, negotiate a contract and settle on terms. August 2015, four weeks for surveyor and engineer, but because of the delay, tack on 30 days. September 2015, COA meeting and acceptance. October 2015, appeal period over. November 2015, close on the property. December 2015, property goes on MLS, receive offer, sold in 10 days. January 2016, close with new buyer, pay off my VTB, register new VTB. Go from paying to being paid. Oh, what a relief it is. A total of five months, only three months of carrying costs.

Simple accounting:

Paid:          $575,000

Resold:      $975,000

Bills:          $100,000 +/-

Net:            $300,000

Bills include everything from interest on the credit line, park dedication fees, surveyor, gas, bottle of 20-year-old Glen Devron Scotch (our celebratory libation for each level of accomplishment), to a shareholders annual meeting in Puerto Vallarta (although there are only two shareholders, we needed a secretary treasurer and admin assistant to join), and anything in between that remotely contributed towards development.

Now what do I do with myself? Oh yeah, get off your lazy butt and find another one. Gotta love capitalism. Stay tuned for another that’s ongoing. Huge changes. Absolutely huge…

Derrik Libawski

Derrik Libawski B.A., M.V.A., is broker/president of Carriage House Realty Corp. in Brampton, Ont. He currently has five development projects on the go, most in the Caledon, Ont. area.

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Before that lockdown, he specialized as a project manager in residential construction for Mondev, a Montreal-based real estate development firm. As part of the Mondev team, Tassé worked closely with brothers Jordan Owen, 26 and Mark Owen, 28, whose father owned the company. The three struck up a friendship outside work that led Tassé directly back to Jordan, mid-lockdown, with a business pitch to start a company making reusable masks.

Jordan had just returned home to Montreal after his post-graduate program at the Massachusetts Institute of Technology (MIT) cancelled classes and pivoted to online learning. He immediately jumped at Tassé’s idea. With Mark joining the team, they took the pandemic by its horns and launched Bien Aller, a company monikered after Quebec’s COVID catchphrase “Ça va bien aller.” (It’s going to be fine.)  Soon, Bien Aller became the first company to sell reusable masks in Quebec. Within three months, it sold over 250,000 masks across Canada and the United States.

As soon as Bien Aller started helping save lives and generating profits, the trio turned their sights to fix a problem in real estate development that had long irked them. “The problem in the industry is that new residential developments or developers have a hard time efficiently determining the pricing of their units,” says Tassé.

So, they “wanted to build a solution that would allow the developer to have an overall market view of the project, where it’s located, help the developer develop his initial pricelist in a more sophisticated way, and allow the developer to have a platform that allows them to follow in real time the sales of his project and optimize those prices,” he says.

The team used artificial intelligence (AI) algorithms to do away with traditional, more unscientific ways of pricing units, and replace them with a rigorous data-driven approach to fixing the price of a condo unit.

Last June, the trio invited a fourth friend, Benoit Thibeault, and cofounded and incorporated Squarefeet.ai. By September, the startup had launched its online platform that “got great traction from the (real estate) industry,” says Tassé.

With Realtors positioned as the end-users of their technology, Squarefeet.ai “allows them to be able to get the maximum revenue for the developer and it’s going to allow them to differentiate themselves from other Realtors, because they’re backed by AI-driven decisions. This is huge for them because now they have a tool that allows them to be better than the competition,” says Tassé. Ongoing discussions with companies such as Baker Real Estate and JLL have further reinforced Squarefeet.ai’s claims.

“Real estate is a highly driven data industry but at the moment, there are very few solutions that allow us to utilize that data, to (deliver) data-driven solutions. Those data-driven decisions are going to separate the developers that have huge success and the ones that have less. Technology is going to have to be implemented in this industry to be able to keep up with the rest of our lives,” says Tassé, especially in the context of how life and work have changed due to the pandemic.

Data-driven decisions will eventually pave the path for better-designed units, he says, because “we’re going to be able to quantify what works and what the people want to have as units, which ones are the most successful on the market, which are going to allow the developer to create better buildings and maybe eventually cities that are more catered to the need of its different citizens.”

By the end of 2021, the company aims to release the first version of its technology to “cater to the existing stock of real estate” within Quebec, while planning to expand the product’s reach to the rest of Canada thereafter.

Bootstrapped by ongoing earnings from Bien Aller and with venture funds raised through various business and startup accelerator programs, Squarefeet.ai is poised to establish its foothold within a futuristic vision to help the real estate industry evolve into “something that’s more refined than what it is right now,” says Tassé.

Sohini Bhattacharya

Sohini Bhattacharya is a contributing writer for REM.

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Yet, real estate development causes pressure to be put on a city’s parks, as it typically leads to increased population density, which means that existing parks have to serve more and more people. Accordingly, s.42 of the act gives municipalities a mechanism to continually expand and enhance their parks or create new ones. It can be used to compel all developers to convey two to five per cent of their development or redevelopment land to the city for parkland or other public recreation purposes.

Alternatively, the municipality can insist on the developer paying cash-in-lieu of the conveyance. Most often, this payment equals the value of the parkland that would otherwise be conveyed. Cities usually exercise this option upon determining the conveyable land available is unsuitable for parks purposes, particularly in more urban areas where development sites tend to be smaller. Such cash-in-lieu payments are then held as reserve funds and earmarked for later parkland acquisition or development in other more appropriate areas.

But can real estate developers demand they be given the option of paying cash-in-lieu rather than conveying away valuable land? What if this is preferable for them, since they can then adjust for the cash-in-lieu payment on the closing of each unit developed and thus oblige the new purchaser to absorb some of the costs? Do developers have a say in the matter?

The short answer is “no”, as was decided by the Ontario Court of Appeal recently in CIBC v. Urbancorp (Leslieville) Developments Inc., 2020 ONCA 449. The decision concerns a developer being required by the City of Toronto to convey parkland, and then charging about $13,000 to $18,800 extra to each condominium unit purchaser as their proportionate share of the cost of the parkland conveyance. At issue was whether this “parks levy” was properly charged in accordance with each agreement of purchase and sale (APS) for each unit.

The CIBC decision is particularly notable for turning on the interpretation of certain consumer protection clauses included in the standard forms of the Tarion Warranty Corporation. These forms are widely used in Ontario for new homes and condominiums pursuant to the Ontario New Home Warranties Plan Act and are commonly appended to the APS for each unit in a development. Schedule B of the Tarion Addendum is meant to assist purchasers with calculating the final closing amount payable with certainty. It succinctly summarizes the various adjustments – such as property taxes, utilities charges and HST payable – included in the APS in longer-form clauses.

In this case, the Ontario Court of Appeal underlined the following portions of the parks levy clause from the APS:

“The Purchaser shall be responsible for the amount of any parks levy or any charges pursuant (to) a Section 37 Agreement (pursuant to the Planning Act), levied, charged or otherwise imposed with respect to the Condominium, the Property or the Unit by any governmental authority, which is equivalent to the common interest allocation attributable to the Unit as set out in Schedule “D” to the Declaration” (Emphasis in original).

Although the term “parks levy” is not defined in the applicable legislation, the court held that such levies are understood to be financial charges, particularly in the land development context. As the court held that the taking of property cannot be construed as a “parks levy” within the meaning of the aforementioned clause, the adjustments of approximately $13,000 to $18,800 per unit for the parkland conveyance were ruled as improper charges and ordered to be returned to the purchasers.

Part of the argument put forward on behalf of the developer at the ONCA was that the lower-level decision results in “commercial absurdity”. A hypothetical scenario was posited. If the City of Toronto had instead requested cash-in-lieu of the parkland conveyance, then the developer could have properly adjusted for the payments as parks levies and recovered these funds from the purchasers, while simultaneously generating additional revenue by either developing more units or selling the non-conveyed parkland to a third party. It was contended that such commercially anomalous results (akin to double-dipping) are the kinds that the principles of contractual interpretation were designed to avoid.

However, the court felt this hypothetical scenario was unrealistic, speculative and rested on the erroneous assumption that the developer had a choice in the matter. Instead, s.42 of the act clearly states that it is the municipality that “may require” either a parkland conveyance or cash-in-lieu. Moreover, if the developer had originally negotiated every APS to include language that expressly transferred any costs and potential risks associated with the land conveyance to the purchasers, then this issue would not have arisen and the adjustments would have been held as properly charged.

Ultimately, the ONCA sided with the motions judge’s decision, while noting he was “was alive to the consumer protection purpose of the Tarion Addendum”.

Respectfully, however, the posited hypothetical scenario does not seem that far off. If the developer had been lucky, the City of Toronto would have requested cash-in-lieu, the payment would have been adjusted for and recovered, and the non-conveyed land could be made profitable in other ways. It will be interesting to see whether developers more carefully draft their APS clauses in future to expressly cover both this hypothetical scenario as well as the ability to charge purchasers their proportionate share of a parkland conveyance.

Harjot Atwal

Harjot Atwal is a Mortgage Agent (Level 1) with Ontario Lending Solutions (FSRA #13063). He is also a real estate lawyer and has published articles for Law360 Canada, Real Estate Magazine, Canadian Lawyer Magazine, CondoVoice Magazine, and Suhaag Magazine. You can reach him via e-mail.

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It’s not just because the real estate brokerage has sold dozens of pre-construction projects over the years. It’s also because Hersh Litvack, its president and broker of record, has a business card in the form of a Hershey chocolate bar and is nicknamed “The Sweetest Guy in Real Estate.”

“I’ve had more fun with these business cards than probably anything,” says Hersh Litvack.

Licensed with Hershey, the Hershey chocolate bars contain wraps with the brokerage’s information. It hands out about 5,000 of the chocolate bar business cards every year.

“I’ve had more fun with these business cards than probably anything,” Litvack says in a video.

Mitch Parker

Mitch Parker, marketing and sales director of Toronto-based Hersh Condos, says pre-construction condos are also a sweet deal for buyers and Realtors alike.

For buyers, “you get to pick a condo exactly to your specifications that’s going to be brand new, never lived in.” And when house prices are on the rise, pre-construction units appreciate in value between purchase and possession.

Commissions for agents selling pre-construction condos are typically much higher than for resale properties, he says. “On virtually all of our deals, the agent gets four- or five-per-cent commission – depending on what we work out with the developer – and the part Hersh gets is totally independent from that,” Parker says.

Hersh Condos, which has been in business for about 15 years, is not a direct-to-consumer brokerage. Projects by its builder clients are marketed to agents who in turn market to their clients.

It is currently marketing the latest phase of Charisma Condos by Greenpark Group in Vaughan, Ont. and Ultra Towns townhomes by City Park Homes in Thornhill, Ont.

Pre-construction condos received some negative attention in the GTA in 2018 when several projects were cancelled. From January to mid-December 2018, 4,202 new condo units were cancelled, according to condo analytics firm Urbanation.

But the cancellation problem has eased this year. “Of particular importance, virtually every project launched for pre-sale in the second quarter had received planning approval, reducing the risk of cancellations, which have been on the rise over the last couple years,” Urbanation said in a report on the second quarter of 2019.

In October, Tarion, which is tasked with administering the Ontario New Home Warranties Plan Act, announced that starting in 2020 new rules will require builders to provide buyers with information sheets highlighting the risks and considerations that come with buying pre-construction condos.

The information sheets, part of the purchase agreement, will include details such as the risk that pre-construction condos may never be completed, early termination conditions, information about the state of the development (including zoning approval and construction start date) and the expected date when the purchaser can take occupancy.

Parker says there are ways for agents and buyers to reduce the element of risk involved with pre-construction condos. He says they should ask such questions as: What are some of the finished developments they’ve done? Have they finished on time?

“You really want to make sure you’re working with one of the bigger and more reputable builders because the likelihood of them cancelling a project is much, much less than if you’re working with a guy who’s brand new or was a home builder who decided to do a condo tower for the first time.”

He says Hersh Condos gets approached by a number of developers who are new or new to the GTA, but “we’re very selective. It’s our reputation at the end of the day.”

Hersh has dealt with developers like Minto, Kingsmen Group and Lamb Development Corp. over the years.

Pre-sale condos “are typically going to be a little bit more expensive than resale,” Parker adds, but “you’re buying for less than what the building will be worth in the future.”

Parker believes that Toronto area real estate is cheap compared to where it’s going to be in the next 10 to 15 years. “In the next number of years it’s really the GTA that’s going to do exceptionally well. It’s not going to be a big deal in 10 years to say, ‘I live in Vaughan and jump on the subway to go downtown every day.’”

In addition, many buyers are looking not just for a condo but for a lifestyle, he says, and condo and town home builders are increasingly developing communities with “livability and accessibility” where everything you need is within a couple of minutes walk. “They’re not just dropping a building in the middle of nowhere.”

Hersh holds seminars with agents for each development it handles. “We just ran one where we had about 250 Realtors in our office,” who then bring their clients into the sales centre on specific nights, Parker says. During a recent sale event for a project in Burlington, Ont., 133 units were sold in one evening.

“We don’t really put a salesperson into a sales centre and grind the sales out one person at a time. We find that typically doesn’t work.”

Hersh also creates incentive programs for its condo projects. For Ultra Towns, a 55-townhouse development priced from $1.049 million to $1.3 million, Hersh created an incentive program in which purchasers get a cheque back from the developer for $100,000 on closing, which can cover the monthly mortgage, maintenance fees and property taxes for 24 months or reduce the down payment.

It’s “something unique that we’ve never done before,” Parker says of the cash back deal. “We think $100,000 is really enough to pique someone’s interest.”

Hersh recently launched the podcast The Hersh Condos Digital Experience, with the primary aim of helping agents do their job better.

In one video, Litvack teaches how to use social media to build your brand. In another, he stresses the importance of Realtors being nice. “If you’re just looking for your commission, it’s never going to work for you… If you’re looking out for your client, commission just comes naturally.”

Danny Kucharsky

Danny Kucharsky is a contributing writer for REM.

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