Developer of The Sophia Bill Eden says he is out of money. The luxury condo building has gone into receivership, leaving 78 presold units in limbo.
"Unfortunately we've run as others have into large overruns at The Sophia," he said. "It's difficult to get trades (tradeworkers). Costs have skyrocketed, and we've ended up in a situation where the bank has taken over."
The building promised "sophisticated uptown living" at 298 East 11th Avenue in Vancouver and housed a total of 81 units with hardwood floors and granite countertops.
The receiver has 21 days to file a report to the courts.
Eden previously cancelled presales to two other building projects worth an estimated 95 million dollars, Montgomery Estates and The Elyse.
The courts will likely order The Sophia be finished since it is close to completion.
But the presale contracts will be cancelled and the units will likely be sold to new buyers at today's market value -- or, the presale buyers will be offered a chance to purchase at a new, higher price.
A development called Riverbend ran into similar problems. Presale buyers were told they would have to pay an extra hundred thousand dollars or more to keep their homes, and most walked away.
The Galleria near UBC also ran over cost -- and buyers learned they would have to pay more than $30,000 over the presale price to complete the sale. The Sophia buyers weren't told that this project was in jeopardy -- and neither was the company that marketed and sold the units in the fall of 2005.
Donna Macdonald, one of the dozens of Riverbend Pre-Sale buyers who couldn't afford to move in after the developer broke their contracts, has gone to court to make the developer pay for dashing her dream of living at Riverbend.
"Someone else is now living in it with the colours I picked out. IT looks like a cute little house and I wish them well," she said. "But I'm angry, I'm bitter."
NDP housing critic Diane Thorne said unless our laws change, presales could be the next leaky condo crisis.
"I think it should be a guaranteed price," she said. "Prices will go up in the beginning, but I think there's more security for homeowners. They won't buy something they'll lose or not be able to afford."
Bob Rennie, who makes his living marketing presales, says reputable developers welcome new laws.
"Anything the government wants to put in place to protect the consumer doesn't worry those top 15, 20 developers," he said. "If you're getting creative with your financing, or your profit margin is too low, that developer may worry. But then again we're protecting the consumer so let's do it."
Thorne is drafting a private member's bill about pre-sale law and she hopes the government will take it seriously.
Brian Thompson with Dexter Associates Realty said he was assured there would not be any problems with The Sophia.
"Not a clue, not a clue," he said. "I asked on several occasions directly to Bill Eden, how does this stand for Sophia, and he assured me there was no problem, it will be fine. He asked me many times, and he said no, it should be fine."
Homebuilders Association President Peter Simpson says Eden should have honoured the contracts.
"Everybody has overruns, like I said they last time this happened. They suck it up and move on with their brand and reputation intact," he said. "I'm sure there will be a lot of upset developers out there because this has happened again, and this does cloud the whole industry," he said.
If you are a buyer in The Sophia and you would like to share your story with CTV News, please email us at bcnews@ctv.ca.
With a report from CTV British Columbia's Shannon Paterson
