Another major developer in Metro Vancouver has filed lawsuits against people who have defaulted on their contracts to buy condominiums.
CBC News first reported last month that real estate developer Amacon has filed lawsuits against seven buyers in the last month for pulling out of Surrey's Morgan Heights development.
Now developer Onni has filed lawsuits against 20 buyers at its Port Moody project, known as Aria 2.
Some of the contract holders are fighting back in the courts, but others are attempting to renegotiate the contracts.
Caught in between
One of those buyers, Lou Skoda, told CBC News he wasn't trying to make a quick flip when he bought a pre-sale condo at Aria 2 after he came into a small amount of money in 2007.
"We thought we would be able to buy a little larger apartment so that we would have space for our two new granddaughters to come and visit," he told CBC News on Thursday morning.
"So at that time, we expected we would be able to realize adequate funds from our current property."
But the real estate market turned down and Skoda received no offers on his older condo.
So in September, he contacted Onni to find out if the $456,000 deal could be renegotiated and was told no.
Unable to sell his old condo and complete the deal on the new one, he was forced to walk away from the deal.
'I feel unjustly treated. I have a sense there is an enormous unjustified greed on the part of the developer.' — Condo pre-sale buyer Lou Skoda
Then he later received a flyer in the mail saying Onni had slashed condo prices at the development by 25 per cent.
"Our condo was on the list of condo units offered for sale at substantial discount," Skoda said. "Our unit was offered at 25 per cent discount, but Onni refused to let us complete the purchase for this new price. Instead, they offered us a $27,000 discount, which comes to less than six per cent.
"I feel unjustly treated. I have a sense there is an enormous unjustified greed on the part of the developer."
Skoda is now being sued for his $68,000 deposit and damages, which could balloon to much more.
"I'm 79; my wife is 75. We have a very limited fixed income — the bare minimum," said Skoda.
He now hopes a legal loophole will allow him to keep his money. He plans to argue in court that Onni didn't properly notify him of all disclosure amendments to the contract and he should get his deposit back.
It's an argument lawyers for people in Skoda's position are looking into and one that will likely determine whether developers or buyers will lose millions in this softened real estate market.
"The most common call I get these days is, 'How do I get out of the contract?' " said Vancouver real estate lawyer Ken Pazder.
Most presale contracts are carefully designed to protect the developer, he said.
"These are custom-drafted contracts that are very one-sided, and they favour the developer at every stage of the process," he said.
A few test cases are already underway which will indicate whether buyers can walk away or whether they'll be obliged to complete the transactions, Pazder said.
"They have in the contract something called the final outside completion date, and that is the drop dead date by which the purchasers can supposedly walk out of the contract," he said.
"We've had a case right now where the client is suing the developer over a clause which purports to let them extend even beyond that date.… That's being litigated right now."
But he also suggested that people consider attempting to renegotiate their contracts with developers.
"If someone is in a pickle like this, your best bet is call your realtor if you have one, call your lawyer, and then see if you can negotiate something with your developer, because, trust me, the developers at this point are having these conversations every day with a whole bunch of people," he said.