Delco Management Group failed to tell homebuyers that its proposed Ajax, Ont., subdivision can't be built until the firm strikes a land-use agreement with its neighbour, a couple who bought into the development five years ago says.
Jayson and Jennifer Fowler put down $20,000 on a townhouse shortly after discovering the Village Creek Homes development in February 2011. But the Scarborough man said he recently learned there's an easement issue between the proposed subdivision and Saint George's Anglican Church on Randall Drive.
"To me, the builder was negligent in not letting us know up front that everything hadn't been done before we signed that agreement," Fowler said.
The couple says they had expected to move into their home by March 2012, but the development has yet to break ground.
"It got pushed and it got pushed and it got pushed."
When the developer's sales representative failed to explain the delay following numerous emails, Fowler, a mortgage broker himself, went to the town's planning department for answers.
That's where he learned about the easement issue with the church, something he says Delco knew about when it bought the land in 2008.
Robert de Savoye, a church warden, said the two sides have not reached an agreement since their negotiations began about eight years ago.
The restrictive covenant limits the use of the strip of land south of the historic church's parking lot to pedestrians, but the developer intends to build a road and four units, according to its site plan.
"It's a situation that bothers us a little bit," de Savoye said in a phone interview. "If they wouldn't build for another 100 years, we'd be happy."
A 'double-edged sword'
Fowler, who currently lives at his mother-in-law's home in Scarborough with his wife and daughter, is reluctant to back out of his agreement since his townhouse nearly doubled in value over the last five years, which also means it's now harder to get into the housing market as a buyer.
"It's very much a double-edged sword," Fowler said. "It's come down to the point where you either take your money and run or you keep it in and hope everything goes through."
But it could be a long time before construction begins, according to the Town of Ajax, since the developer still hasn't applied for a building permit.
The Fowlers are making an application under the Ontario New Home Warranties Plan Act, which will allow them to claim $150 each day past the outside occupancy date in their contract — up to a maximum of $7,500.
But the couple said that's little consolation for spending years in housing limbo.
"Delays are fairly common but the length of this delay is unusual," said Howard Bogach, president and chief executive of Tarion, a watchdog organization that keeps track of Ontario builders and developers in a public database.
"We did make a call to find out and we understand the builder's certainly prepared to finish the project," he said.
Delco did not respond to numerous requests for an interview with CBC.