Toronto condo developer launches lawsuit against buyer who couldn't pay for unit

A resident who failed to close on a condo in Toronto is now apparently being sued by the building's developer in a case that many are considering a fair warning to would-be buyers in the city.

A document shared to X this week outlines a Statement of Claim launched with the Ontario Superior Court of Justice this month, which alleges that the defendant — who was purchasing a unit in a new building at 55 Mercer Street — failed to pay the balance remaining after they put down a $143,200 deposit.

Centre Court developments is suing a buyer for $666K after they failed to close on a condo at its 55 Mercer Street project.

Know the risks of purchasing a pre-con before you sign. There’s a lot that isn’t explained to you at a sales centre & by agents.https://t.co/zBFx7MvqNY

— Varun Sriskanda (@VarunSriskanda) February 16, 2024

The amount, a substantial $616,226.53, marked an increase from what was originally supposed to be $572,790 due after the down payment, which the statement says reflects "certain adjustments, fees and expenses being required to be paid by the purchaser on the unit transfer date," per the condo's Agreement of Purchase and Sale.

So, developer CentreCourt — represented as 99 BJW Residences Inc. in the litigation — is now looking to keep the entire deposit, along with $666,226.53 for damages for breach of the purchase agreement, interest, and the costs associated with the legal proceedings.

While some online are calling the developer "predatory" and say their reputation may take a hit for going after an individual who "obviously cannot afford to close," others are cautioning buyers to do their due dilligence with all contracts and paperwork before getting themselves on the hook for a property, especially in these financial times.

A purchaser must have a lawyer look and explain all the paperwork especially all the schedules to them so they fully understand it. There’s a 10 day cooling off period so there’s no excuse not to go to a lawyer. Way too many realtor’s don’t understand the builders forms.

— Andrey ( Andy) Shinberger (@AShinberger) February 17, 2024

"One of many lawsuits between builder and distressed buyer who couldn't close!" one realtor wrote on X. "Have heard some distressed sellers who think they can simply give back their units with no implication (besides maybe a lost deposit). Not the right attitude. And consult with a lawyer!"

"It's getting ugly, for sure Already had associates asking how they can get out of deals," another said of the current economic landscape, during which a wealthy developer going after someone who can't afford to close on a unit is particularly scary.

blogTO reached out to the CentreCourt team for further information and comment on the case, but did not receive a response.