Ontario condo developer suddenly cancels years-long sales deal — unless buyers pay $100K more

The foundation's been poured for Soraya Palma's first home and she's finished paying the $40,000 deposit. But the 29-year-old says she now has no choice but to walk away from the Barrie, Ont. development.

Last Wednesday, she received a letter that left her speechless. 

Pace Developments informed her it's cancelling their agreement from March 7, 2020 and returning her deposit even as construction on the walk-up condos continues. That is, unless she agrees to pay an additional $100,000 on top of the original $512,000 purchase price. Experts CBC News spoke to say what Pace is doing is most likely legal, although they caution that they haven't seen the contracts.

But that's little consolation to Palma.

"It's just ridiculous. I feel completely screwed over," she told CBC News.

Palma said she sacrificed to afford it. She and her partner put off their wedding and she moved in with her parents when she got laid off from her downtown Toronto office job because of the pandemic. She now runs her own business.

"To add another $100,000 onto a home, it's not pennies," said Palma. "I'm unfortunately going to have to walk away from the deal and look for something I can afford."

She and dozens of people who invested in 70 Phase 1 units of Pace's Mapleview Developments, known as Urban North Townhomes, between 2018 and 2020 were given the same two options by the Richmond Hill developer last week —they could walk away with their deposits or buy back in for $100,000 more.

The developer's about-face, however, doesn't affect buyers of townhouses on the same site, who bought more recently at a higher price.

CBC News spoke to five of the buyers who'd recently chosen their preferred fixtures, paid extra for upgrades and received assurances from Pace that after years-long delays, their new homes would be ready in 2022. They all say they were blindsided by the letter they received from the developer.

"Due to circumstances beyond our control and despite the vendor's best intention, our project has been challenged by COVID-19," says the letter dated Nov. 9, 2021 and obtained by CBC News.

"At this time, financing for the project on terms satisfactory to the vendor cannot be arranged ... Unfortunately, it will force the project vendor to now cancel your agreement of purchase of sale." 

Pace's managing director Yvonne Sciavilla told CBC News the company requires more money because of increased costs of raw materials and labour related to the pandemic, sometimes "upwards of" 60 per cent.

"This situation affects buyers at the earliest stages of this project, which had a scheduled completion date of over a year ago," she said.