ontario real estate

More and more townhouse developments around Toronto are going into receivership

If you're looking for signals that the Toronto area's real estate market is not faring well, there are far more than the dismal sales totals, the slowing of new construction projects and mortgage debt being at an all-time high.

Despite never-ending talk from leaders about our housing (read: affordability) crisis, there has been a surge in the number of homes available for sale, all with prices apparently too high for most buyers to jump at in this economy.

As a result, listings are spending far more days waiting on the market and in the case of some builds, developers are finding themselves unable to sell enough units to cover their costs.

Enter the very problematic trend of entire new communities and/or the firms behind them going into receivership, leaving buyers to stress about if and when they will get to move into the new homes they'd been waiting for as big lenders move to reclaim their money.

The latest in these is a townhouse complex in Richmond Hill, right off Yonge Street near King Road, which is helmed by King Development Inc. — a company that was put under receivership just last month.

One creditor alleges that the developer owes upwards of $22.5 million that they have failed to make payments on since late last year.

The mortgage company has since attempted to sell the property altogether — located at multiple addresses on Bostwick and Bond Crescents — but is now seeking the help of a court-ordered receiver to "achieve a definitive sale of the property within a reasonable time frame."

Per Storeys, 72 urban and luxury townhouses were set for the site, with an unknown number of families invested and now impacted by this decision.

It will likely mean, at best, that deposits are returned and contracts voided, with another firm potentially stepping in.

Interestingly, some of the same parcels of land were at the centre of different, more scandalous legal proceedings last year when then-owner Ideal Developments was forced to pay steep fines for selling forthcoming homes at the addresses of 8, 12 and 14 Bostwick Crescent without a licence to do so.

In that case, the land also went into receivership, leaving buyers in an even worse predicament — they were out hundreds of thousands of dollars in deposits each, only a fraction of which was paid back in damages.

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