Pre-sale buyers want their deposits back from troubled Richmond development

Pre-sale buyers worried about stalled project Frustrated pre-sale buyers are demanding answers as construction of a development in Richmond remains stalled after three years.

Three years after construction suddenly stopped on a large Richmond development, pre-sale buyers are demanding the developer return their deposits.

“Every time I drive by No. 3 road, I see a big hole. I just see my money is in the hole,” says Joshua Chang.

Four years ago, his family bought a 3-bedroom pre-sale condo in the Atmosphere Development on No. 3 road and Alderbridge. They put down a $250,000 deposit on what was billed as a grand scale neighbourhood. The Atmosphere plan was for seven towers of residential, commercial and retail units.

Then in the spring of 2020, after the developer excavated a massive hole, construction ground to a halt. The developer blames Romspen, the construction lender, for suspending funding, citing COVID-19.

The project is embroiled in lawsuits between the project owner, Alderbridge Way Group and Romspen. Global Education Communities, one of the largest education and student housing investment companies in Canada, which bought two towers in Atmosphere, is also suing Romspen. That trial begins in January 2024.

The development is under creditor protection to avoid bankruptcy.

Meanwhile, pre-sale buyers who spoke with CTV News are growing increasingly frustrated and angry. They say repeated attempts to get answers from the developer have been ignored, and they want their deposits out now. The developer did not use the money for construction and the deposits remain in trust.

In a statement to CTV News, Alderbridge Way said, “It is disappointing that we reached this point, and we understand and apologize for the frustration this has caused to people who have pre-purchased strata units and invested in Atmosphere. We are moving forward with their best interests in mind.”

DEVELOPER CAN EXTEND CONSTRUCTION DEADLINE

Realtors who sold units in this project are also frustrated with the lack of information from the developer.

In July, they received their first update from Magnum Projects, which marketed the project.

Magnum said, “It is the intention of the developers at this time to continue the construction and to finish the project. The outside date for completion is currently October 1, 2024.”

There is a provision in the contract that allows the developer to extend the outside date to Oct. 1, 2026.

“The purchasers at that point could elect to terminate their contract,” said Lisa Niro, a lawyer who works in commercial real estate.

Some buyers have lost faith in the project, and are considering suing to get their deposits out sooner.

Niro suggests that could be a challenge because the contracts haven’t reached their outside completion date. She adds, they should still contact a lawyer because each contract is individual and might have different clauses in them that might allow them to cancel the contract.

“There’s always an element of risk going into a pre-sale,” says Niro.

It’s a risk pre-sale buyers were aware of. They just never imagined this nightmare would happen to them.