Couple tried to renegotiate deal after existing home didn’t sell
Derrick Penner
Sun
Vancouver Sun / Lou and Donna Skoda couldn’t sell their apartment to raise the money to close on their Aria 2 purchase in Port Moody, behind them. Lou Skoda says when Onni heard of their difficulties, the company offered them a six-per-cent price reduction. Photograph by: IAN SMITH, Vancouver Sun
At least one buyer being sued by the Onni Group of Companies for not completing his purchase of a Port Moody condominium plans to fight back.
Lou Skoda who, with his wife Donna, signed a pre-sale contract in September 2007 to buy a two-bedroom apartment in Onni’s Aria 2 building in Port Moody, is looking for a lawyer to take on his case.
Onni is suing 20 purchasers in the Aria 2 development for not completing their purchases. It is the second developer in recent weeks to file suit against pre-sale buyers for the same reason. Amacon was the first.
Skoda will argue that Onni amended Aria 2’s initial project disclosure statement twice, but never delivered copies to the couple, a requirement under real estate development marketing rules.
Skoda said the couple always wanted to complete the purchase, but the downturn in Metro Vancouver’s real estate market got in the way of their plans, and Onni wouldn’t renegotiate their deal.
Skoda said they wanted to use money he had received in a court settlement to buy a place with more space for visits by their two young granddaughters.
The couple promised to pay $456,000 for the Aria 2 apartment, and believed they would easily be able to pay for it when they sold their existing apartment nearby, which they tried to do last fall.
“When the time came, we put our apartment for sale, but it was no good,” Skoda said. “We bought [in Aria 2] at the height of the market, and were trying to sell our apartment when real estate prices went through the floor.”
Without an offer on their existing property, Skoda said they wouldn’t have the money to close the Aria 2 purchase. At age 79 and living on a very limited fixed income, Skoda said there was no way he would be able to get a mortgage to buy the new apartment.
Skoda said he asked Onni for an opportunity to renegotiate the deal.
“I thought under the circumstances, I could make a deal and get at least some of the deposit back,” Skoda said. The answer, however, was no.
Now the couple stands to lose the $68,350 deposit they put down on the property, plus additional damages that Onni is seeking in its suit against them, starting with lost property value.
In January, Skoda learned that Onni was putting the apartment the couple wanted to buy up for resale at a price 25 per cent less than their contract price as part of the developer’s “liquidation” of 375 unsold units.
On that basis, Onni could seek at least an additional $45,000 from the Skodas.
Skoda said he approached Onni again, offering to buy the apartment at the reduced price.
“I made my case [to the developer] and showed him that at a 25-per-cent discount we can really swing [the purchase],” Skoda said. “It would not be easy, but we would really like to proceed and finalize the sale.”
However, the best Onni could come back with was a $27,000 discount — about six per cent — which was not enough of a break.
Real estate lawyer Ken Pazder said the most common question he is getting these days is from pre-sale buyers looking for options to get out of their contracts, and the majority are not speculators simply looking to abandon a bad deal. At least three hold contracts in the Millennium Water Olympic Village development.
“In a lot of cases, it’s that they can’t close,” Pazder said. “Their bank is only going to lend them money based on the [unit’s] current appraised value, which in some cases is $100,000 less than what they’re paying.”
Pazder added that pre-sale buyers have to take a close look at their contracts and their project’s disclosure statement to see if the developer has lived up to the letter of its obligations.
If a developer did not deliver an amendment to the disclosure statement within the required period, that would allow a buyer to rescind the contract. Also, if an amendment substantially changed the contract’s terms, that would be another.
Pazder said “nine out of 10” pre-sale contracts include clauses that allow the developer to seek forfeiture of deposits, plus additional damages.
“I haven’t seen any [pre-sale] contracts that are remotely fair,” Pazder said. “They are completely skewed to the developer.”
If a developer fails to complete a contract, he said, the buyers’ only recourse is to get their deposit back.
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