Starting back in the 1980’s, condominiums became a popular real estate alternative for those not wanting to take on the ownership of a single family home along with the maintenance tasks that are typically associated with this form of property ownership.  Condominiums were not only popular with those looking for a full time residence, they also drew the attention of those wanting a secondary property to enjoy on weekends or during their annual vacations.

The southern Georgian Bay area was one such area where condominium ownership became popular during the early years when condos were first introduced.  Undoubtedly the most popular condo development to arrive on the scene in the Collingwood area was Cranberry Village.  Many were two bedroom units with one or two bathrooms although larger three and even some four bedrooms units were available.  In addition there was Rupert’s Landing, Lighthouse Point, Dockside Village and others.  Many of these were aimed at attracting recreational buyers, those that were drawn to the area wishing to spend their free time skiing, golfing and biking etc. versus looking after the routine maintenance that comes with home or cottage ownership such as grass cutting, snow removal, exterior painting etc.

It was during the 1980’s that condominium developments began to spring up at Blue Mountain Resort with Chateau Ridge, Cachet Crossing, Wintergreen, Heritage Corners and others.  That form of property ownership ultimately led to the Village at Blue when Intrawest arrived on the scene around 1998 after purchasing part ownership of the resort.  As experienced developers at resorts they owned such as Whistler Blackcomb in BC they knew first hand the demand that existed for this type of real estate and the investment potential it offered purchasers through their formal rental program.  The rest is history and that trend continues today throughout the area.

While resort style condos are still popular, recent years have seen the local market offer more in the way of units suitable for full time use with many offering basements, garages and high end finishes etc, making them more suitable for full time occupancy.  This trend will no doubt continue but there is also a dark side to purchasing a condo especially when you purchase one that has yet to be built.

On a recent trip to Costa Rica I regularly walked past this condo development that after almost 20 years has never been finished.  The story goes that the developer went bankrupt, there are a number of owners as well as purchasers and the issues have never been resolved.  As a result these partially completed buildings sit idle year after year deteriorating with exposed concrete and rusting steel.  Ultimately they will no doubt need to come down but at whose expense?  There is no doubt a legal entanglement that will also need to be addressed before anything happens.

Situations like this have and continue to happen in our area.  For those that have been in the Collingwood area for some time many will remember Sierra Lane which are the condos located on the east side of the first fairway on Blue Mountain’s Monterra golf course.  The builder went bankrupt.  Ultimately the units were finished after been sold off by the bank but the construction was so bad the occupancy permits were revoking forcing owners to move out.  The site sat for years surrounded by a high chain link fence before the situation was resolved following many lawsuits.

More recently a similar situation arose in Thornbury for new units pictured below that sit adjacent to the Foodland grocery store.  Work on the site appeared to be moving at a snail’s pace or not at all.  Once again the builder fell on hard times defaulting on an $8.8 million mortgage.  A further $1.6u million in buyer’s purchase deposits was also involved.  The yet to be finished project went into receivership and a search was initiated to find a buyer able to complete the project.  As the units sat empty they have reportedly incurred moisture damage and there are said to be foundation, fire separation and other building code issues.

In one media report published in Collingwood Today, one frustrated buyer after numerous delays to completion was asked to submit a further $100,000 deposit  If that is the case, there is nothing worse than throwing good money after bad.  When it comes to consumer protection for new homes and condominiums, consumers in the province rely on Tarion which was established by the Ontario government to administer the province’s new home warranty program.  The problem here is that if a builder does not or is unable to return your deposit, Tarion provides deposit protection for new condominiums of up to a maximum of $20,000.  If your deposit amount is more than that and often they are, there is no Tarion warranty covering the additional deposit funds.

Purchasing a new condominium or home to be built can be an exciting purchase but there is obviously a risk factor as well.  Builders must first be registered with Tarion and reputable ones are.  That is not to say that problems can’t arise and sometimes as we have seen in our area many times they do.  As REALTORS® we are not permitted to list for sale homes or condos that are being built by someone who is not registered with Tarion.  In the event there is an issue Tarion will go after the REALTOR® as well as the builder or contractor involved.

Situations like this are another example of Caveat Emptor which is the Latin phrase meaning “let the buyer beware.”  Several years ago I sold a number of unfinished condo units in a building the developer had not finished.  In this case the units were under Tarion’s warranty program and the seller I represented was a bank.

Often things that look too good to be true often are.  Whether it’s a new condo or a home to be built, do your homework and often that may involve the REALTOR® that is selling the property(s) in question.  As always please feel free to Contact Me , I would be happy to answer any questions you may have or offer advice that will assist you in making an informed purchase.